Category Archives: China-U.K.

UK And China In Diplomatic Tiff Over Queen’s Lying-In-State

THE SPEAKER OF the UK House of Commons has reportedly banned any Chinese delegation that might attend the state funeral of the late Queen Elisabeth II from viewing her lying-in-state in Westminster Hall.

The hall is part of the parliamentary complex and is under the joint administration of Parliament and the Crown. The ban would not apply to the funeral itself on September 19. That will be held in Westminster Abbey, which is under the authority of the Crown alone.

The Commons Speaker, Sir Lindsay Hoyle, is understood to have refused a request for access to Westminster Hall over Chinese sanctions against five members of the House of Commons and two members of the House of Lords.

China imposed sanctions in 2021 on the seven parliamentarians and two others for accusing Beijing of mistreating Uighur Muslims in Xinjiang.

Last September, Sir Lindsay told Zheng Zeguang, China’s ambassador to the United Kingdom, that he could not come to Parliament because of Beijing’s sanctions, a ban decried by Beijing as ‘despicable and cowardly’.

The United Kingdom has not seen the death of its head of state for 70 years. However, the protocol would be to invite the heads of state of all countries with which London has diplomatic relations to attend the funeral.

There had been some discussion in London, however, whether President XiJinping should be invited given the present low state of bilateral relations, strained by concerns ranging from human rights in Xinjiang and Hong Kong to Russia’s invasion of Ukraine.

While an invitation was issued, it was not expected that Xi would attend but that Bejing would send a delegation led by Vice-president Wang Qishan, who earlier this week signed the condolences book at the British embassy in Beijing.

On September 16, the foreign ministry said it was still deciding whether to send a delegation.

If one does attend the funeral, its members will pass under a statue of Wang Zhiming, a Christian pastor in Yunnan martyred during the Cultural Revolution. He is one of ten 20th-century Christian martyrs memorialized above the Great West Door of Westminster Abbey.

The diplomatic tiff may presage a further deterioration of relations between London and Beijing. The new UK prime minister, Liz Truss, has signalled her intent to be more hawkish towards China than her predecessor Boris Johnson and may formally recognize the treatment of the Uyghurs as genocide.

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With Or Without Xi, COP26 Involves China

Screenshot of home page of COP26 climate conference web site captured on November 2, 2021

THE UK GOVERNMENT’S decision, as host of the COP26 climate summit in Glasgow, ‘not to provide the video link method’ and so prevent President Xi Jinping from participating directly in the event just seems petty.

The UK has insisted that only leaders attending in person could address the meeting. Xi, who has not left China since the outbreak of the Covid-19 pandemic last year, has been able to submit only a written statement.

As the world’s largest polluter today, China has to be part of whatever solutions world leaders come up with for mitigating greenhouse gas emissions. Marginalising it does not seem to help in that regard, even if Foreign Ministry Spokesperson Wang Wenbin passed on a softball opportunity to make an issue of Xi’s exclusion when questioned by state news agency Xinhua during the ministry’s routine press conference today.

Xi, too, pointedly brushed off any perceived insult. The official English translation of his statement opens thus:

There is little doubt in this Bystander’s mind that the UK would not have insisted on in-person participation without the approval of the United States.

The poor state of China-US relations could cast a long shadow over the climate summit. Beijing has not been receptive to US President Joe Biden’s attempts to carve out climate as a rare area of cooperation, although members of his Democratic Party are divided on the extent to which other US interests, such as human rights, should be traded for cooperation on climate.

Biden may also have less than fond memories of how China lobbied other developing nations at the Copenhagen edition of the COP summit that left the Obama administration, in which he was vice-president, taking far more of the blame for that meeting’s lack of progress than it deserved.

It is unclear when the decision to ‘uninvite’ Xi from Glasgow was made, whether before, after it during last weekend’s G20 leader’s meeting in Rome, which Xi did attend by video link.

However, hopes that that meeting would result in an agreement to phase out coal consumption were dashed with China, which contributes 28% of carbon emissions and consumes more coal than any other nation, among the countries resisting making binding commitments.

After the meeting, US President Joe Biden called out China, Russia (President Vladimir Putin is another Glasgow no-show) and Saudi Arabia for being uncooperative.

Last month, China confirmed to the United Nations its updated pledges to bring its emissions to a peak before 2030, cut them to net-zero by 2060, and raise its wind and solar power generation capacity to 1,200 gigawatts by 2030.

However, it has not offered any new pledges to cap energy consumption or make an earlier start on cutting back its use of coal from 2026. Xi’s statement to the G20 confirmed that the ‘1+N’ framework is the timetable China will be following.

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AUKUS Subs Will Stir Waters Already Ruffled

WHEN US OFFICIALS say that a particular policy move is not aimed at countering China’s growing influence, it is a good rule of thumb to assume that it is. Thus, with the security pact newly announced between the United States, the United Kingdom, and Australia, the awkwardly named AUKUS.

AUKUS seeks to provide Australia’s navy with the technology and advice to build at least eight nuclear-powered submarines, which will make it the seventh navy to deploy them. They will replace a dozen conventionally powered subs ordered from France but never delivered because of unresolved disagreements over local sourcing, among other issues.

That $90 billion order has been cancelled, to Paris’s displeasure. To add to European annoyance, the AUKUS agreement was announced the day before the EU was due to outline its Indo-Pacific strategy. The EU is increasingly being pushed into an uncomfortable no man’s land between Beijing and Washington.

It is unimaginable that Australia will deploy the subs anywhere but under the waters of the region. Equally, it is inconceivable to regard the announcement as anything other than a tighter drawing together of the three countries in a common ‘Indo-Pacific’ security alliance, which has China as its threat nation.

While the subs are the headline-catching element, the agreement also involves the trio sharing information and technology on intelligence and quantum technology. This will complement, not replace, existing arrangements such as the Five Eyes intelligence-sharing partnership between New Zealand, Canada and the AUKUS countries.

As such, it adds another layer to a growing set of overlapping security cooperation initiatives being advanced in response to China’s growing military power.

Australia will also buy cruise missiles from the United States for the Royal Australian Air Force as well as Tomahawk cruise missiles for its navy, which presumably the subs will carry.

Cruise missiles are the weapon of choice to attack, or at the least deter, naval aircraft carrier battle groups at sea. They also give Australia, and by proxy the West, the capability to strike targets inside China such as airfields and command and control facilities for the PLA’s integrated air and missile defence systems.

Beijing’s criticism of the deal has been swift, if somewhat pro-forma, perhaps because the military threat is some years out; the subs are unlikely to be deployed until 2040. By then, the PLA-Navy will have more of its own nuclear-powered subs in the water.

Foreign ministry spokesman Zhao Lijian said:

The nuclear submarine cooperation between the US, the UK and Australia has seriously undermined regional peace and stability, intensified the arms race and undermined international non-proliferation efforts. The export of highly sensitive nuclear submarine technology to Australia by the US and the UK proves once again that they are using nuclear exports as a tool for geopolitical game and adopting double standards.

He added that:

Seeking closed and exclusive clique runs counter to the trend of the times and the aspirations of countries in the region, which finds no support and leads nowhere. Relevant countries should abandon the outdated Cold War zero-sum mentality and narrow-minded geopolitical perception, respect the will of the people of regional countries and do more to contribute to regional peace, stability and development. Otherwise, they will only end up shooting themselves in the foot.

The time frame for building Australia’s subs will be lengthy. According to US President Joe Biden, the first 18 months of the agreement will be spent working out how to build the subs under these conditions without violating non-proliferation commitments.

Australia is a party to two regional non-proliferation agreements. Its prime minister, Scott Morrison, says that his country seeks to become neither a military nor civil nuclear power.

That the United States and the United Kingdom are ready to take the rare step of exporting sensitive nuclear technology to a non-nuclear nation underlines the serious intent of AUKUS. It may also spur Beijing to accelerate the build-out of its blue-water navy.

Australia’s nuclear submarines, when they do eventually launch, will provide another means of deterrence.

The AUKUS agreement has been welcomed in Tokyo and Taipei, and will be, if not so openly, in countries such as South Korea, Vietnam, Thailand, the Philippines and India, also concerned about China’s growing demonstrations of military power in the region.

However, other ASEAN members will be warier in pubic and private. Indonesia has expressed its concern ‘over the continuing arms race and power projection in the region’.

If the agreement does not worsen Australia-China relations, it will only be because they are already at such a low ebb. Canberra is arguably now the Western government that is most openly confrontational towards China save for Washington.

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Rolling Over The Rule Of Law

Screenshot of website of Essex Court Chambers, London

OUR MAN AMONG m’learned friends in London draws our attention to a Financial Times report on the chilling effect resulting from China’s retaliatory sanctions on the United Kingdom for that country’s comments about Xinjiang. Our man is concerned because of nascent signs of self-censorship among lawyers wary of antagonising Beijing and how it suggests a broadening of the push to co-opt and coerce the commercial world into muting international criticism of Beijing’s policies in Xinjiang and, indeed, Hong Kong.

The nub of the story is that last month China sanctioned several UK members of parliament, academics and individuals for ‘gross interference’ for their comments about Xinjiang. The list included Essex Court chambers, a group of some 90 barristers, four of whose number had provided a legal opinion in January for the Global Acton Legal Network, a non-profit working with the World Uyghur Congress and Uyghur Human Rights Project.

The sanctions bar those named from doing business with Chinese individuals or entities, ban them and their families from entering China, Macau and Hong Kong and freeze their China-based assets.

Essex Court barristers specialise in commercial and financial litigation, arbitration and public international law. Chambers are a particularly English institution. They are not a law firm as it would be recognised elsewhere. They are the offices of barristers who are self-employed providers of expert legal opinion and advocacy in court under the English legal system. They are instructed case-by-case by solicitors, the other qualified lawyers in the English system, who deal directly with clients.

These distinctions may be lost in China. After the sanctions were announced, Essex Court removed from its website a news item about the four barristers who had written the opinion about Xinjiang and pointed out that as independent barristers, no other member of the chambers would have been involved in writing it. The China Daily headlined its report on that ‘Barristers in retreat on lies over Uygurs’ and reiterated the charge that the opinion had used ‘the same tone as that of some Western politicians and media outlets’.

Our man says solicitors will now be wary about instructing Essex Court or any set of chambers whose barristers take on work for groups or individuals critical of China. Arbitration work in China via Hong Kong’s legal system has been a lucrative source of business for UK lawyers. Similar work in Singapore and the tax haven and brass nameplate islands of the Caribbean will now be at risk.

The General Council of the Bar, the professional association for barristers in England and Wales, has called the sanctions ‘an attack on the rule of law’. London lawyers are now wondering who might be next and if or when, in that incremental way of pushing back Beijing now employs, the tactic might be employed against the big City of London and international law firms.

The Financial Times quotes an unidentified member of Essex Court saying that theirs is ‘the first set of chambers to be made subject to these sanctions . . . but it may well not be the last’. Our man adds that if Beijing can cower UK and US law firms, even just by making them shy off taking on cases and clients that would displease China, the notion of the independence of the rule of law in Wester legal systems would be weakened. It would be a significant victory in the fight to undermine Western values.

Addendum: Chen Yixin, Secretary-General of the Central Political and Legal Affairs Committee, gave a speech at a recent study session on Xi Jinping Thought on Rule of Law. 

Among selected passages from the speech:

Marxism believes that politics determines the rule of law, and the rule of law serves politics. The practice of the rule of law at home and abroad shows that there is politics in the rule of law, there is no rule of law divorced from politics, and there is no rule of law that transcends politics.

Equally as blunt:

From China’s national conditions and reality, we will take the road of rule of law that suits us, never copy the models and practices of other countries, and never take the path of the so-called ‘constitutional government’, ‘separation of powers’ and ‘judicial independence’ of the West.

And:

As China moves closer to the center of the world stage, we must accelerate the strategic layout of foreign-related rule of law work, coordinate domestic and international governance, and better safeguard national sovereignty, security and development interests.

No one can say that Beijing is hiding its intention.

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The Hard Edge To The Soft Power Of Chinese Patriotism

WESTERN COMPANIES ARE not the first multinationals to suffer the power of a ‘patriotic’ Chinese consumer boycott when they get caught in the crosshairs of a political dispute.

US and European apparel retailers such as Nike, Adidas, H&M, Tommy Hilfiger and Burberry are now getting the same treatment that South Korea’s confectionary-to-hotels conglomerate Lotte and Japanese carmaker Toyota were subjected to in the past.

They are being abandoned by Chinese consumers and celebrity endorsers, and ‘disappeared’ from social media marketing and retail outlets. Their own-brand stores may remain open, but they are empty of customers, who are turning to indigenous brands.

In this case, the core dilemma for Western firms is whether they should continue to use cotton from Xinjiang in their products and face Western consumers’ censure for condoning the use of forced labour and other human rights abuses against Uighurs. Or should they stop using it and face the loss of their lucrative Chinese markets through boycotts by Chinese consumers whose shopping patriotism is being whipped up by the government?

In January, the United States banned the import of cotton from Xinjiang, and the United Kingdom told domestic firms doing business in China that they would be fined if they cannot show their products are not linked to forced labour in the region. Then, earlier this month, those two countries were joined by Canada and the EU on sanctioning Chinese officials over Xinjiang.

China has retaliated with countersanctions and knows that turning the economic screws on Western companies is a potentially more powerful way to silence its critics, as evidenced by how it has bought the silence of Islamic governments over the treatment of the Muslim Uighur minority in Xinjiang.

Western technology companies could be the next to be drawn into this as Xinjiang is a significant high-tech manufacturing sector feeding into global supply chains.

Beijing is defiantly maintaining in the face of international condemnation that accusations of cotton picked by forced labour and other charges of human rights abuses in Xinjiang are false. It describes its repression in Xinjiang as a campaign against terrorism, separatism and religious extremism.

This Bystander can allow that authorities are sincere in their view. Many governments view the violent repression of terrorism, separatism and religious extremism as legitimate. Some take their expression within ethnic minorities as evidence of them as being inherent in ethnic identity, as Beijing does with Uighurs.

Its policy response now abandons any pretence of affirmative action and accommodation of ethnic sensitivities towards the Uighurs and instead actively and often forcibly promotes their assimilation into the culture and society of China’ majority ethnic group, Han Chinese.

This justification of its near-total elimination of the Uighurs’ traditional ethnic identity appears a disproportionate policy response from the perspective of liberal democratic values. However, Beijing has no ideological qualms about repression and is restrained in its use only by its assessment of what is feasible and effective in pursuing its goals. Hong Kong provides another case in point.

Similarly, it calculates that Western sanctions and criticism over Xinjiang are unlikely to approach a severity that would force it to change course. It is betting that many Western companies will self-censor and quitely press their governments not to censure Beijing over Xinjiang and only criticise Beijing when they judge they will pay a higher price in their home market for not doing so.

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China-Europe Relations Get Another Kick

Screenshot of Premier League listing of broadcasters in China, September 4, 2020

THE TERMINATION BY England’s elite football league, the Premiership, of its broadcast rights deal in China potentially gives another kick to the already bruised relationship with Europe.

The cause of the cancellation of the three-season £564 million ($700 million) contract is said to be streaming service PPTV withholding a £160 million payment that was due in March. PPTV is owned by retail billionaire Zhang Jindong’s Suning Holdings.

With the suspension of the Premier League because of Covid-19, there were no games to stream. Negotiations between the two sides over a rebate and revised terms for the coming season, which will start next week behind closed doors, have come to nothing so far but reportedly are not entirely dead.

The cancellation could be a negotiating ploy, but Suning’s talk of a ‘strategic adjustment‘ does not suggest the door is open too far. Nonetheless, the cancellation will take a bite out of the £4.2 billion the League has sold the overseas rights to its games last season, this and next.

The dispute appears to be contractural. However, but politics is never far from sport. The NBA, the globally expanding dominant professional basketball league in the United States, got a sharp lesson in that last year when its games were temporarily taken off-air in China following a tweet supporting Hong Kong protestors by an official of one of its teams.

Last December, what looked like an organised social media campaign called for one of the Premier League’s top teams, Arsenal, to fire one of their star players, Mesut Ozil for being critical of Beijing’s treatment of his fellow Muslims.

Relations between the United Kingdom and China have since taken a turn for the worse over Hong Kong and after the U-turn by the UK government excluded Huawei from its 5G network.

The cancellation also came as Foreign Minister Wang Yi concluded a five-nation bridge-building visit to Europe ahead of the China-EU summit on September 14. The trip did not go as well. It highlighted that the distances between Europe and China on issues such as Huawei, human rights, Hong Kong and Taiwan remain enormous.

Wang’s warning in Norway that awarding the Nobel Peace Prize to any Hong Kong protesters would be taken as interference in China’s internal affairs particularly didn’t go down well, kindling memories of the years-long rift caused by awarding of the 2010 prize to the late activist Liu Xiaobo.

Nor did his threat that president of the Czech Senate, Milos Vystrcil, would ‘pay a heavy price’ for leading a delegation to Taiwan. This earned Wang an sharp rebuke from Germany’s foreign minister, Heiko Maas, that was supported by several of his EU colleagues. Such tough talk, even if couched in diplomatic niceties, marks a turn for the Europeans.

None of that, however, undermines Beijing’s need for better relations with Europe as insurance against a US-European coalition against it — or the Premier League’s need to serve one of its biggest markets.

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UK Excludes Huawei From Its 5G Network

Huawei logo displayed at the Mobile World Congress 2019. Photo courtesy of Huawei.

THE UNITED KINGDOM has fallen into line with the United States in excluding Huawei Technologies from its 5G network. The government announced today that domestic telecoms providers would have to stop buying new Huawei kit by the end of this year and remove existing equipment from their 5G networks by 2027.

The new policy does not apply to Huawei kit in 2G, 3G and 4G networks. Oliver Dowden, the Digital Secretary, told parliament that its latest decision would delay the UK’s roll-out of 5G by more than a year and add millions of pounds to its cost. (Update: UK officials now pegging cost at up to £2 billion ($2.5 billion) and delay at two to three years.)

After a review in January, the United Kingdom previously decided that Huawei could remain in non-core parts of the country’s network but capped at a 35% market share. This was in effect taking a line that the national security risk of Chinese equipment on the UK network could be mitigated.

The government has reversed that view, accepting Washington’s position that telecoms equipment that cannot be trusted is a national security threat to be beaten, and that mitigation cannot work. The UK U-turn follows May’s US sanctions designed to disrupt Huawei’s ability to get its chips manufactured. Concerns over Huawei’s supply chain reliability as much as Washington’s diplomatic pressure, intense as it has been, seem to have weighed in London’s latest decision — or at least in its presentation of it.

Other political factors in play are growing belligerence among UK lawmakers — particularly those from UK prime minister Boris Johnson’s Conservative Party — and across Europe about inbound Chinese investment and influence, the United Kingdom’s need for a post-Brexit trade deal with the United States and the increasingly fractious relationship between London and Beijing over both the Covid-19 pandemic and Hong Kong.

Excluding Huawei from the United Kingdom gives Beijing one less reason to go easy on Hong Kong following the imposition of its national security law.

Nonetheless, London’s decision is being lauded in Washington, which was infuriated by the January review, and welcomed in Brussels. Our man in Washington sends word that officials in the administration are expecting the United Kingdom’s change of heart to resonate among other Western nations.

It is likely to be greeted with annoyance in Beijing, however, and taken as further confirmation of the United Kingdom operates as an arm of US foreign policy (hence the United Kingdom’s emphasis on the supply chain security element to its decision). London will be on alert for retaliatory measures from China in what will inevitably be a period of tense relations between the two.

Separately, Lord Browne, the former head of BP, who had been hired by Huawei five years ago to provide a respected and well-connected face at the head of its UK operations, has said he will be stepping down early as Huawei UK’s chairman. He will leave the company in September.

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UK 5G Decision Muddles UK-US and UK-China Relations

THE UNITED KINGDOM’S renowned ability to muddle through the middle is being put to the test. The Johnson government’s decision to allow Huawei a continuing role in developing the United Kingdom’s 5G networks is a case in point.

Beijing threatened repercussions on China’s trade and investment with the United Kingdom if Huawei was excluded. Washington threatened to cut off intelligence sharing with London if it was not.

The Trump administration is pursuing a global campaign against the telecoms giant which it accuses of spying for China, a charge the company denies. That campaign is a pivotal battle of the Trump administration’s technology war with China.

With Brexit barely hours away and the United Kingdom needing future trading relationships with both of the world’s two largest economies, wiggling along the fence bottom down and damn the splinters was Prime Minister Boris Johnson’s only option. It is a discomfort that will be familiar to US allies that are China’s regional neighbours.

Hence the Shenzhen-based telecoms giant will be allowed up to a 35% share of the UK 5G network’s periphery, i.e., the radio access network, but be banned from the most sensitive part, the core, and excluded altogether from areas near military bases and nuclear sites.

The 35% cap also applies to the rollout of the UK’s fibre broadband network, for which Huawei already has a 45% share. Similarly, the company currently exceeds the 35% cap in two of the three of the four UK mobile networks that deploy Huawei kit.

The government’s decision still needs the UK parliament’s approval. Voices in Washington are urging backbench MPs to oppose it for the sake of preserving the special relationship between the United Kingdom and the United States. They will also argue, correctly, that the core and the periphery of 5G networks are converging, so even periphery access now is a (not so) long-term security threat.

The Trump administration already regards the United Kingdom as an unreliable ally for moves such as joining Beijing’s Belt and Road-linked Asia Infrastructure Investment Bank against Washington’s wishes and for generally being more accommodating to China than it likes — although the Trump administration’s default view is that any ally that does not fall entirely in line with its wishes is unreliable. As the president had made calls to Johnson ahead of the Huawei decision, his next reaction is reliably likely to be petulant.

While the 5G decision will be as irritating to China as it is the United States, for Huawei, the win, in so far as it is not a defeat, comes as the Trump administration is seeking to bolster its barriers against the company gaining access to US technology. Washington has leaned heavily on its allies, although only with any success with Australia, New Zealand and to an extent Japan. European nations and the EU, bracing for a trade assault from the Trump administration, have been less accommodating.

Commerce Secretary Wilbur Ross says tighter restrictions are coming Huawei’s way. However, US reports have said that a proposal to further restrict US companies from selling computer chips and other components to the company, including for the first time via their overseas subsidiaries, has been delayed.

The defence establishment is concerned that the move would accelerate China’s drive to develop indigenous technology. At the same time, the lost sales by US firms could cut into their research and development spending, at the risk of blunting US military technological superiority.

On another front, court proceedings are underway in Canada to have Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, extradited to the United States to stand trial on fraud charges connected to alleged busting of sanctions on Iran. Meng denies the allegations, and the case could take years to resolve.

Prosecutors say Meng’s case is separate from the broader trade dispute between the United States and China. However, the inverse is true. The trade dispute is only a part of the more existential confrontation between Washington and Beijing for technological leadership in which the United Kingdom finds itself uncomfortably caught in the middle.

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China Gets Its UK Nuclear Prize, Probably

THE UNITED KINGDOM’S decision to go-ahead with three nuclear power plants, the first at Hinkley Point, has had a somewhat surprisingly gruff welcome from state media.

Shortly after taking office in July, UK Prime Minister Theresa May ordered a second look at the projects, which were approved by the previous administration. This was to include cost and environmental concerns but also a security review of China’s involvement, which includes part-financing new reactors at Hinkley Point and Sizewell, both to be built and operated by France’s EDF, but also leading the construction and operation of a reactor at Bradwell to indigenous Chinese designs.

“However, in spite of the approval, China-phobia sentiments continue to hover and could possibly introduce more troubles as construction of the project gets underway, a Xinhua commentary thundered. “It is reported that while announcing the go-ahead, Theresa May has also promised ‘significant new safeguards’ to make sure that investment from China does not threaten national security. Of course, the British leader’s misgivings make little sense.”

The new safeguards give the British government a veto over sales of full or partial ownership of the reactors both while they are being built and then operated, and institutes national security reviews for future critical infrastructure projects, a practice that is common in most large economies, including China.

There had been dire warnings from the Chinese side when May announced her review that abandoning the projects would end the ‘golden era’ of Sino-British relations championed by her predecessor David Cameron and his finance minister, George Osborne.

“Let us hope that London quits its China-phobia and works with Beijing to ensure the project’s smooth development, Xinhua’s commentary continued.

Its testiness underlines the uncertainties that still surround the projects. China is desperate that Bradwell goes ahead to give it a key early sale to a developed nation of its still untried Hualong One reactor. Beijing hopes that will lead the way to a global export market for what a senior official at China General Nuclear Power estimates will be some 200 nuclear power plants.

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China Eyes Global Nuclear-Reactor Export Market

 

A model of a Hualong One (HPR1000) nuclear reactor

An export that glows in the dark: a model of a Hualong One (HPR1000) nuclear reactor

THE REAL PRIZE for China in the United Kingdom’s nuclear industry is not Hinkley Point but the plant at Bradwell that is planned to come after — and all the foreign sales of its new nuclear reactors that may come after that.

China, though the state nuclear company China General Nuclear Power Group (CGN), will finance one-third of the £18 billion ($23.5 billion) cost of Hinkley Point C, which will be the UK’s first new nuclear plant in decades. The other two-thirds and the technology will be supplied by the French utility EDF.

The deal gives EDF a showcase that it hopes will offset setbacks in projects in Finland and France for its latest design of reactors, but CGN gets a toehold in western Europe. Bradwell would be built using an indigenously designed Chinese reactor.

It would also be a key early sale in what could be a global export market for, at best guesstimate, at least 130 nuclear power plants. At $15 billion-25 billion each, that adds up to a decent chunk of change. China’s nuclear industry has its eyes firmly on the prize.

Beijing has enthusiastically pursued nuclear power domestically as a low-carbon energy source. As of March, there were 33 nuclear reactors operating in the country, with a total capacity of 28.8GW. A further 22 were under construction with a capacity of 22.1GW. The goal is for nuclear to generate 6% of China’s electricity by 2020, against 2% now.

Other countries are warier of nuclear power, and in particular since the accident at Fukushima in Japan in 2011 (which also caused a temporary suspension of new plant building and approvals in China while new nuclear safety rules were drawn up).

Earlier this month, the new British government of prime minister Theresa May put Hinkley Point on hold for further review.

First, there are the perennial environmental and safety concerns about nuclear energy.

Second, there are concerns about the economics of the deal. The UK government gets out of the upfront building costs and plugs a looming energy shortfall, but it has had to guarantee a price for the electricity Hinckley Point will produce that is twice the current wholesale price — and to do so for 35 years.

In the complex economics of energy pricing that may not prove to be as expensive in the long term as it looks, but the sums — and their underlying assumptions — certainly warrant a second look

Third, May is said to be concerned about China’s involvement, both on grounds of national security and because she has long been critical of the ‘gung-ho’ approach to Britain’s welcoming of Chinese inward investment championed by her predecessor administration of David Cameron and in particular by his finance minister George Osborne.

Osborne and May have long had a distrustful political relationship. Replacing him as finance minister was one of her sets of appointments.

State media have been admonitory of the last-minute delay, saying that cancellation of Hinkley Point could threaten what President Xi Jinping called the ‘Golden Era’ of China-UK investment relations during his state visit to the UK last year. Beijing’s ambassador to Britain, writing in the Financial Times this week, called the times a ‘crucial historical juncture’.

In October last year, before the ‘Brexit’-induced change of prime minister, the UK had reached a strategic investment agreement with China covering three nuclear power plants:

  • Hinkley Point C;
  • an investment in Sizewell that will also use French EPR reactor technology; and
  • Bradwell, whose construction China was expected to lead and which will use Hualong One reactors.

The Hualong One has evolved from upgraded Chinese versions of the French 900MWe class pressurised water reactors already widely in use in China. CGN has developed it jointly (at Beijing’s direction) with China National Nuclear Corp. (CNNC).

The Hualong One is considered to be a ‘third-generation-plus’ reactor, which means it complies with the post-Fukushima safety requirements. It is entirely Chinese designed and intended for sale in international markets as well as domestic deployment.

A Hualong One nuclear reactor under construction at FuqingSix are to be built in China, according to CGN. The International Atomic Energy Agency lists three as under construction. The one in Fuqing in Fujian province is shown to the left.

Internationally, two are to be built in Pakistan and a third is planned for Argentina. CNNC chairman Sun Qin has been quoted as saying that China plans to build 30 nuclear power units in countries along its “One Belt, One Road” initiative by 2030.

Bradwell, though, would be the first build in a developed economy. As such, it would be a highly prized sale that China does not want to let slip through its grasp.

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