BEIJING - French Minister of Economy Pierre Moscovici was recently in Beijing to convince Chinese officials that the French debate over the transfer of the nuclear technology to China was nothing to worry about.
“We are discussing the way the strategic clauses will be applied in regard to technology transfer and intellectual property,” said Moscovici. This discussion however, added the minister, will take the form of a “probe” led by the finance ministry auditing department, and not an “investigation,” as some French newspapers had reported.
The target of the probe is the nuclear partnership signed between the French 84.4% state-owned power company EDF and its Chinese counterpart, the CGNPC (Guangdong Nuclear Power Company) to design a mid-sized reactor.
According to a report published in the French newspaper Le Canard Enchaîné, in 2010, EDF had signed a confidential contract with CGNPC, bypassing France's state-owned nuclear giant Areva. The report also said that EDF had sold nuclear technology without authorization.
Paris did not want EDF to go it alone with CGNPC, particularly since Areva was busy developing its own nuclear reactor, “Atmea,” with Japanese company Mitsubishi. The French government blocked the contract, and in Nov. 2012, EDF, Areva and CGNPC, ended up signing a new three-way agreement to design the reactor.
“This probe seems incoherent,” a Chinese law professor told Moscovici during a debate at the People University of China, in Beijing. “It means you don’t trust the Chinese, right? Do you think China is stealing from France?” “There are no suspicions,” answered the French minister of economy.
The issue surrounding the failed 2010 contract is emblematic of the dilemma the French nuclear sector is facing – how much technology and intellectual property should be handed over to the Chinese? For the next 15 years, 80% of the French contracts in the nuclear sector will be signed with China.
On Dec. 24, a Chinese expert named Pu Jilong wrote in the China Daily state-owned newspaper that the Chinese nuclear power plants would generate 60 gigawatts by 2020, that is to say five times the present power produced, despite a year-long hiatus in plant constructions after the Fukushima disaster.
EDF’s Executive Vice-President Hervé Machenaud, who supervised the 2010 contract, said that “If France doesn’t get involved in the Chinese nuclear program, China will turn to the Canadians, Americans or the Russians.”
“If China develops a reactor similar to the ones we’re building, thanks to France’s know-how, the conventions and standards of our products will become references in the sector,” adds Machenaud. He is nicknamed “the Chinaman” for relentlessly advocating sharing French nuclear savoir-faire with Beijing.
Appropriating foreign technology
Among the 16 Chinese plants already in use, six are French second-generation plants – the CPR 1000. China builds its own plants – it’s had the technology for a long time – but relies on French companies for parts. About 85 French small and medium sized companies provide equipment for Chinese nuclear plants.
For how much longer will China need foreigners to build its nuclear plants before it starts to compete with them? “As long as we’re providing them with our experience, they will welcome us and introduce us to their market,” believes Machenaud.
An executive from another French company in the nuclear sector – who has worked with the Chinese – doesn’t share Machenaud’s opinion: “Today, our problem is that the Chinese appropriate foreign technology faster than foreigners can develop new technology. On second-generation nuclear reactors built in China, France now only plays a residual role.” He adds that the Chinese nuclear program “will always be a self-governing, nationalist program.”
Beijing has never pretended otherwise, it wants to control the entire nuclear sector. “We’ll be self-sufficient in a few years,” anticipates a Chinese expert who is currently working on the development of nuclear technologies. He says China already has two research facilities specializing in so-called third-generation nuclear technology in Sichuan and Shanghai. “Since China and India will be the top markets in this sector, foreign countries can’t ignore us. We have to learn from the French, the Americans and the Russians, then acquire all the technology and choose the best solution for us.”
According to this expert, out of the four French third-generation Pressurized Water Reactors (PWR) being built around the world, the two that are increasingly late on schedule are in Europe – the worst of them being in France. The two others – in Taishan, China – however are right on time.
The Chinese political logic requires things to be done on time for them to be qualified as a success. Especially for CGNPC, which competes with the number-one state-owned nuclear company, China National Nuclear Corporation.
The China National Nuclear Corporation is working on the American side to acquire U.S. technology on third-generation plants – the AP 1000 from Westinghouse. Americans have promised to help them develop the new, more powerful, 1400 version. “The PWR plants being built in Europe aren’t very fluid and France has a hard time financing its projects,” says the Chinese expert. “For them, the only way to make money is on foreign markets, meaning in China.” A former CGNPC executive adds, more diplomatically, “the French and Chinese nuclear friendship will last for a long time.”
The Fukushima disaster has had consequences for the Chinese nuclear sector. After nine months of inspecting its nuclear plants, the Chinese government gave them the all clear in Oct. 2012. Among the problems identified by China is the use of different technologies, which tends to complicate controls. The solution would be to streamline technology.
The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.
LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.
Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.
Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.
The role of the nuclear pact
Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.
It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.
He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."
The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.
Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.
Iranian Supreme Leader Ali Khamenei in 2020commons.wikimedia.org
Riyadh's warming relations with Israel
Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."
The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."
Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."
Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.
For if nuclear talks break down, Iran's regime may become more aggressive.
Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.
Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.
For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.
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