Move goes against the norms of the Nuclear Suppliers Group

China's biggest operator of nuclear power plants has confirmed that it will export two 340 MW nuclear power reactors to Pakistan in a $2.375-billion agreement, in a controversial deal that analysts say goes against internationally-mandated guidelines governing the transfer of nuclear technology.

The China National Nuclear Corporation, which has already set up two civilian nuclear power reactors in Pakistan, has now signed construction contracts to build two more.

The two governments had in principle agreed on the deal during President Hu Jintao's visit to Islamabad in 2006. But they are yet to publicly formalise the deal.

The CNNC, however, has said in a statement, posted on its website last month, that it had reached the agreement “with the aim of developing an overseas nuclear power electricity market”.

The CNNC has already agreed to build two power reactors in Pakistan, the 325 MW Chashma-1, which started operating in 2000, and Chashma-2, which will be completed next year. The statement said the two new reactors are “2x340 MW”. “Chashma-2 will be a benchmark for C-3 and C-4 projects,” said the statement. On February 12, the two governments had signed a loan contract which went into effect in March, according to the CNNC.

But, Chinese officials on Thursday continued to deny a deal was in place. One official said while the government had given its backing to the deal in principle, some final details still had to be ironed out .

But other diplomats said the government's caution was sourced in the debate the deal was likely to trigger in the international community.

The deal goes against the guidelines of the Nuclear Suppliers Group (NSG), of which China has been a member since 2004. The NSG does not allow the sale of nuclear equipment to countries that have not signed the Nuclear Non-Proliferation Treaty and do not have a Comprehensive Safeguards Agreement with the International Atomic Energy Agency. When India signed the civilian nuclear agreement with the United States, this requirement was waived.

Chinese officials on Thursday did not say whether China had approached the NSG or how it planned to secure a waiver.

All officials said was the deal would “strictly follow” the IAEA norms and the reactors would come under the IAEA's supervision.

Officials also defended China's nuclear relationship with Pakistan, amid concerns over Pakistan's proliferation record.

Asked about the deal, Foreign Ministry spokesperson Jiang Yu said: “In recent years, China and Pakistan have been cooperating in the field of civilian use nuclear energy. Our co-operation is consistent with the two countries' international obligations, is for peaceful purposes and is subject to the IAEA's regulations and supervision.”

Possible concerns in India “would not be relevant” to China's nuclear engagement with Pakistan, said Zhao Gancheng, a scholar at the Shanghai Institute for International Studies (SIIS).

“India, too, signed a civilian nuclear deal with the United States,” he said.

While China voiced opposition to the Indo-U.S. nuclear deal, officials now often cite the deal as precedent for greater nuclear exchanges with Pakistan.

The deal, if agreed, would be consistent with China's policy to expand nuclear energy sector and support other countries' access to civilian nuclear energy for peaceful means, said Mr. Zhao.

“China's official position is to support every country's right to develop nuclear energy for peaceful purposes,” he said. “So China will certainly do what it can to help countries, including Pakistan.”

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