Strategically Countering China’s Global Nuclear Ambitions

BY
Ken Luongo and Paul Murphy

In an increasingly carbon-choked world, a global nuclear power groundswell seems to be surfacing. The civil nuclear future will be providing smaller and non-traditional nuclear power plants to developing economy nations, remote settlements, and industrial operations including desalination and hydrogen production. The question is how this next-gen nuclear wave will play out and whether China will dominate it.

A recent spate of speeches and articles have augured the beginnings of a new U.S.-China Cold War. This conflict is not a certainty, and if it develops, it will not mimic the classic Soviet-American competition. It will be much less about ideology and much more about global technological superiority, competitiveness, and influence.  

How the nuclear energy landscape of the latter half of the 21st Century evolves is a significant concern. The future of clean energy is a central global economic, energy, environmental, diplomatic, and security issue.

At the moment, the U.S. arguably has the technical edge in next-generation nuclear, but that may not last if it is not carefully nurtured and accelerated through policy innovations that emphasize both technology promotion and effective project delivery. China’s reactor development is state financed, its exports state supported, and the Belt and Road Initiative (BRI) its market conveyor. Made in China 2025 is a state-led blueprint for elevating China to the top of the world’s high-tech pyramid. Under this framework, its High-Temperature Gas Reactor (HTGR) at Shidao Bay is advancing, and China has invested heavily in molten salt technology, which also has military applications.

China’s global nuclear ambitions can be countered. Romania’s recent elimination of the China General Nuclear Power Corporation (CGN) from its Cernavoda reactor competition is a prime example. But the strategy of the future must be global, holistic, and persistent.

An effective strategy to counter China’s 21st Century nuclear ambitions would have 5 components: (1) integrate essential partners; (2) provide competitive financing and project delivery solutions; (3) target key markets and provide early stage support to newcomer nations; (4) ensure the highest project standards; and (5) maintain strong nuclear safety, security, and safeguards.

There is demonstrated, deep bipartisan support in the U.S. for next generation nuclear power. The Executive Branch and the Congress have provided a stream of legislation and funding. But, despite this commitment, the scale of the financial support from the government for meaningful project development is relatively small and the deployment strategy not well defined. There also are disconnects between government agencies and with (and within) the next-gen nuclear industry. Bridging these gaps is essential and would force the focus to be on results, not just research, and that is the only way to win the future nuclear competition. 

Expanding partnership internationally also is essential. The U.S. can’t go it alone. The atrophy within its nuclear industry supply chain necessitates collaboration with allies. And these allies have woken up to China’s metastasizing challenges. Canada, Australia, the U.K., and the European Union have all taken tougher stances against China’s missteps and aggressiveness, including its political crackdown on Hong Kong, military activities in the South China Sea, treatment of minority groups within China, deception on COVID-19, coercive diplomacy, trade threats, and intellectual property theft. America should take advantage of this reversal of fortune to recraft its alliances to ensure they effectively respond to China’s nuclear strategies.

While the necessity of creating stronger international and private sector partnerships is clear, there are two potential showstoppers on the path to checking China’s future nuclear power dominance – financing and future market cultivation.

Democratic nations and private sector companies are at an extreme disadvantage when facing state financing from China. Recently the U.S. has taken steps to enhance its nuclear export financing capability. The U.S. International Development Finance Corporation removed a nuclear power financing prohibition and the U.S. Export-Import Bank created the Program on China and Transformational Exports

 If deployed rapidly, creatively, and robustly, these tools will strengthen the U.S. ability to compete with Chinese financing offerings. But they may not be enough to overcome China’s sovereign investment strength. America and its allies need a comprehensive private sector and government financing mechanism that covers multiple phases of a project’s lifecycle, from early-stage programmatic support with hands-on training based on experiential knowledge through project delivery and operation.

This type of financial strategy also would support the cultivation of target markets for next-gen reactors. Foundations need to be laid far in advance of the technology selection with countries considering small modular and advanced reactors. The deployment of the first of these new reactors will arrive inside of 10 years. America and its allies need to aggressively take advantage of this decade to cultivate clients because China will be unrelenting in leveraging its advantages to establish dependent relationships with these nations.

The core of this future nuclear market is developing economy nations that require smaller scale, distributed electricity. Because they mostly are nuclear newcomer nations, they will require enhanced support to ensure that the technology is operated responsibly. This includes “how to” training and direct advisory support. The ability to offer this comprehensive training and to support high levels of safety, safeguards, and security is a strategic advantage possessed by the U.S. and its allies.

In responding effectively to China’s competitive nuclear advantages, the U.S. needs a comprehensive, calculated, and integrated strategy that promotes its interests, values, partnerships, and global stability. The consequences of the failure to act strategically, globally, and successfully to counter China’s nuclear ambitions could be a century dominated by China-exported and controlled civil nuclear technology. This will create global security dangers and exacerbate geopolitical disadvantages.

The China challenge has been raised in high relief in recent months, but the integrated strategy for countering it is lagging. If that lasts for much longer, the opportunity to provide an effective counterweight may be lost.

Ken Luongo, President, Partnership for Global Security

Paul Murphy, Managing Director, Murphy Energy and Infrastructure Consulting, LLC

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