US China Policy: the Sweet and Sour

Advanced nuclear program gets Chinese input, despite dispute

EVEN while confronting China over its intimidation of Taiwan and other conduct, the Clinton administration quietly approved Beijing's participation in developing the world's most advanced nuclear-power reactor in the United States.

Four federal departments, two independent agencies, and the National Security Council concurred in the Jan. 25 decision to grant visas to six Chinese nuclear engineers to work with Pittsburgh-based Westinghouse Electric Company on the reactor program.

The decision illustrates the built-in complexities and contradictions of the administration's policy of "strategic engagement" with China. On one hand, it wants to nurture smooth relations with the Communist giant to ensure US access to the world's largest market. On the other, Beijing persists in behavior that senior officials acknowledge is inimical to international stability and US security.

With the AP-600 reactor, which the US government is partially funding, economics won out.

Officials justify the visa decision as a step toward securing a job-producing slice for the US nuclear industry of a multibillion-dollar market for civilian nuclear technology in China. French, Canadian, and Russian firms are already ahead in grabbing pieces of the largest pie of its kind on earth. Says one official: "If you are not in, you're out, and it hurts your competitive position in the world."

But arms-control advocates decry the move. They say it perpetuates a misguided US policy that encourages dangerous and irresponsible Chinese conduct by elevating corporate interests above holding Beijing accountable for weapons proliferation, piracy of US copyrights and trade secrets, massive human rights violations, and threats to regional stability.

"You really can't be in the slave trade if you want to control it," says Henry Sokolski, a former Pentagon official who heads the Non-Proliferation Policy Education Center, a think tank. "You are treating China as though it is a regular member of the peaceful nuclear society of nations, and it is not."

Critics also question the decision in light of China's extensive efforts to illegally acquire US advanced technology. Though the AP-600 project does not involve military-related technologies, they say it will provide advanced know-how to China's fledgling nuclear-power industry. A Westinghouse official, however, insists the Chinese experts will be working on conventional parts of the reactor under "very sophisticated security procedures."

China has no civilian nuclear-cooperation agreement with the US and is on a list of 42 nations, including Iran, Iraq, Israel, and Pakistan, barred from such cooperation because they pose proliferation or national-security concerns. Waivers may be granted by the Energy Department with the assent of the State, Defense, and Commerce Departments, the Nuclear Regulatory Commission, and the Arms Control and Disarmament Agency.

Because of the serious concerns involved, the NSC joined those bodies in the deliberations on China's involvement in the AP-600 program. The approval of the six visas turned out to be unanimous, an administration source says. Normally, congressional notification would be required. But in this case, officials relied on a blanket waiver approved for the reactor program in 1985 and did not notify Congress, apparently to avoid opposition from members critical of the administration's China policy.

The decision contrasts sharply with the state of Sino-US relations at the time it was made.

Some US officials and members of Congress were already concerned over intelligence reports last summer that China in 1994 sold ballistic-missile components to Iran and Pakistan. Citing inconclusive evidence, the White House avoided imposing economic sanctions against China under a 1990 arms-control law.

But within days of the visa decision, US officials revealed new intelligence reports that China had sold nuclear-arms-related equipment to Pakistan and cruise missiles to Iran. At that point, President Clinton ordered a suspension of $10 billion in US government financing of American business deals in China pending further investigation.

The visa decision also came as the US was monitoring what it considers a dangerous military buildup by China on its coast opposite Taiwan. Those forces on March 9 began live-fire war games intended to coerce Taiwan into ending what Beijing regards as a drive for independence. Clinton ordered two US carrier battle groups into the area as a precaution against a Chinese invasion.

Other serious disputes also clouded Sino-US relations at the time of the decision, including US charges that Beijing had failed to fulfill an agreement to end piracy by Chinese firms of US computer software, movies, and other "intellectual property." For its part, Beijing was irate over US criticism of its human-rights record.

An administration official says the decision to grant the visas was partly aimed at encouraging Beijing to end its objectionable conduct by bringing "the Chinese side into the global mainstream as responsible, engaged partners." It was also, he added, intended to help the US nuclear industry gain entry into the Chinese market.

Westinghouse and its partners in the AP-600 have brought experts from 23 nations to the US to work on the program in what industry sources acknowledge is a sales tactic. Countries that have experts trained on the reactor will have a built-in incentive to buy them, they explain.

China is hungry for new power sources to bridge massive energy shortages that limit industrial expansion. Scott Peters, a spokesman for the Nuclear Energy Institute in Washington, says Beijing would like to expand nuclear-generated electricity from the current 2,100 megawatts to 20,000 megawatts - or the equivalent of about 15 conventional reactors - by 2020.

China operates two French-built reactors and has purchased two more. It is also purchasing two each from Canada and Russia. With the AP-600, its boosters say, the US will be offering technology that is much safer, cheaper, and easier to run.

STILL in the design phase, the AP-600 is touted as the "next generation" nuclear reactor. It consists of factory-built modular units that will be easy to ship and assemble as opposed to current reactors, which are built on site. The new reactor will also be less complex than existing reactors, says Howard Bruschi, general manager of advanced technology at Westinghouse.

One of the AP-600's most outstanding features is its "passive" safety systems. These rely on natural forces, such as gravity, to move water for emergency cooling and to perform other operations rather than relying solely on error-prone human or mechanical systems.

Westinghouse is leading the project in partnership with a consortium of US utilities, the US Energy Department, and the Electric Power Research Institute.

A total of about $400 million has been sunk into the project since 1985, says Mimi Limbach, a Westinghouse spokeswoman. That amount includes more than $63.9 million in federal funds. Construction of the first model is expected to begin by 1998-99.

Critics of the administration's China policy question whether the commercial expectations are overblown, given the country's uncertain political and economic future. Their main concern, however, is what they regard as the Clinton administration's willingness to tolerate behavior that threatens US interests and global security.

"There should be penalties for that behavior, and one of the penalties should be a lack of nuclear cooperation with China," says Gary Milhollin of the Wisconsin Project on Arms Control in Washington. "We are giving them economic and technical benefits that they are not entitled to."