Siddharth Varadarajan

China may be open to backing India-United States deal on civil nuclear energy

New Delhi: Regardless of the precise meaning either side attaches to the words used, the very mention of "civil nuclear cooperation" in Tuesday's summit-level joint declaration by India and China marks a turning point in bilateral relations between the Asian giants.

Considering the expansion of civil nuclear energy to be an "essential and important component of their national plans to ensure energy security," India and China, the declaration said, "agree to promote cooperation in the field of nuclear energy, consistent with their respective international commitments." The joint declaration, released after talks between Prime Minister Manmohan Singh and President Hu Jintao of China, also notes the need for an "international energy order," and for global energy systems to take into account the needs of both countries based on a "stable, predictable, secure and clean energy future." "In this context, international civilian nuclear cooperation should be advanced through innovative and forward-looking approaches, while safeguarding the effectiveness of international non-proliferation principles."

"This is the first time that a reference to civil nuclear cooperation has been made in a joint document at this level," C.V. Ranganathan, a former Indian Ambassador to China, told The Hindu . Even though the declaration talks of consistency with international non-proliferation principles and commitments, said Mr. Ranganathan, this had to be seen in the context of Chinese concern about the repercussions from North Korea's recent nuclear test as well Beijing's lingering unhappiness at the Indian nuclear tests of 1998.

Indeed, the willingness to enter into a dialogue on civil nuclear cooperation with India suggests that China might finally be revising its hitherto negative assessment of the July 2005 India-United States nuclear deal. More than the possibility of India being able to access nuclear energy technology, Beijing is opposed to Washington's "unilateralism" in trying to rewrite the rules of the international non-proliferation regime for its own preferred friends and allies.

Past unease

In its first demi-official comment on the deal last October, People's Daily noted in an unsigned commentary that if "the U.S. buys another country in with nuclear technologies in defiance of an international treaty, other nuclear suppliers also have their own partners of interest as well as good reasons to copy what the U.S. does."

More recently, in a sharply worded commentary published on October 30 in the wake of the North Korean nuclear test, People's Daily said "national security," and not nuclear non-proliferation, was the "strategic objective" of the U.S. "India established a nuclear programme not to defend against or attack the U.S., Russia, Britain, China, France or even Pakistan. India has three to seven times the amount of conventional weapons that Pakistan has. It is Pakistan that needs nuclear weapons. ... After India tested nuclear weapons, the U.S. quickly realised that imposing sanctions was not the best direction to take. It chose instead to find ways to encourage India to be a responsible nuclear power and to help India develop into one of the economic superpowers of the 21st century. It even wanted to develop a civilian nuclear power programme with India. This was in violation of the Nuclear Non-Proliferation Treaty. ... It is clear that the United States's deliberate violation of the NPT is a move to contain other nations. U.S. assistance to India is a kind of nuclear proliferation, vertical proliferation."

Ironically, the same commentary also attacked Washington for turning a blind eye to outward proliferation from Pakistan. "As long as the U.S. needs anti-terrorism support, it will keep Pakistan on its side as a non-NATO ally and give it billions of dollars of support. It no longer worries about the impact of a nuclear Pakistan on the NPT. It will not concern itself with the legitimacy of the Pakistani government, or investigate the legal liabilities of A.Q. Khan, the father of the Pakistani atomic bomb."

Changing norms?

By now agreeing to explore civil nuclear cooperation with India if China's "international commitments" allow it, President Hu is implicitly telling the Indian side his Government is not opposed to Nuclear Suppliers' Group changing its norms to permit commerce with India. "China is slowly coming around to the India-U.S. deal," said Mr. Ranganathan, who also served as Convener of the Government's National Security Advisory Board in 2005. "They may hide behind some other NSG member's opposition but I don't think they will be the first to object."

The two countries have engaged in nuclear commerce in the past, notably in 1995 when Beijing supplied low-enriched uranium for the Tarapur reactor, as well as in the 1980s when India apparently sourced heavy water from China. Until June 2004, when China joined the NSG, Chinese nuclear exports were governed by the 1997 Regulations of the PRC on the Control of Nuclear Exports as well as its December 2003 White Paper, "China's Non-proliferation policy and measures." According to these documents, Chinese nuclear exports were to be based on adherence to three principles guarantee for peaceful use, acceptance of International Atomic Energy Agency (IAEA) safeguards, and no retransfer of nuclear material to a third country without prior permission. Chinese law only prohibited the sale of equipment or technology to any nuclear facility that was not under IAEA safeguards. Thus, the sale of nuclear equipment and material to safeguarded Indian facilities was totally consistent with Chinese law till 2004.

Domestic rules

After joining the NSG, however, China brought its domestic rules in conformity with those of the 45-country cartel. As spelt out most recently in its 2006 White Paper, "China's Endeavours for Arms Control, Disarmament and Non-proliferation", "acceptance of IAEA full-scope safeguards by importing countries has been set by China as the precondition for nuclear exports." It is precisely this "precondition" that the U.S. now wants the NSG to waive for India.

Cooperation with Pakistan

One imponderable in the emerging nuclear cooperation equation, however, is the possibility of China and Pakistan deepening their links in this sector with or without the NSG's blessings.

China has built a 300 MW reactor at Chashma, and is in the process of constructing a second 300 MW reactor at the same location under the "grandfather clause" of the NSG rules, which allows the completion of projects signed before a supplier country formally joined the cartel.

According to a report in the October 5 issue of Nucleonics Week, the widely respected trade journal of the international nuclear industry, the Pakistan Atomic Energy Commission (PAEC) wants China to set up two 1,000 MW reactors alongside the already-functioning Canadian-built Kanupp-1 reactor near Karachi. "The PAEC and Chinese entities are holding discussions about terms, under which Pakistan would import two 1,000-MW PWRs, currently on the drawing board at design institutes controlled by China National Nuclear Corp., or CNNC," it wrote, quoting diplomatic sources. The normally reliable journal also quoted Chinese sources as saying that if the two reactors were exported to Pakistan, they would be placed under `Infcirc 66' IAEA safeguards for standalone facilities.

In February, China and Pakistan signed a bilateral energy agreement, including the possibility of eventual reactor sales. Though Pakistan has since asked the NSG to grant it the same exception it is presently considering for India, China has not said anything on how it would seek to reconcile its desire to sell reactors to Pakistan with its international commitments. With CNNC still completing the design work on its 1,000 MW reactors, however, Nucleonics Week speculates that it may take several years before the proposed Sino-Pakistani collaboration would reach the stage where NSG clearance might be required.

Complicating factor

For India, the one complicating factor in all this is that the U.S. Congress has written into its recent legislation authorising nuclear commerce with India the restrictive condition that the NSG must have made an exception to its rigid rules for India and India alone. In particular, Section 105 (9)(b) states that the NSG must "not permit nuclear commerce with any non-nuclear weapon state other than India that does not have IAEA safeguards on all nuclear facilities," a clear reference to Pakistan and Israel.

In its interactions with Pakistani officials, the Bush administration has said that while it did not consider Pakistan to be eligible for nuclear commerce, the question could be revisited at some point in the future. Theoretically, if China seeks and wins NSG clearance for its proposed cooperation with Pakistan, the U.S. deal with India would stand nullified. Of course, the NSG operates by consensus, and the U.S. can always block a rule change for Pakistan as and when the issue comes up. This means, of course, that China can do the same to India if it wants to. After Tuesday's Manmohan-Hu summit and joint declaration, such a possibility can be considered quite remote. Nevertheless, India should take nothing for granted. Never before has the task of carefully calibrating its relations with both the U.S. and China been more important.

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