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.