Tuesday, March 26, 2013

Chinese Chashma Poker Chip? by Mark Hibbs

It’s late Saturday afternoon here in Ipanema, 28 degrees C and fair, and my options are to go back to the beach or blog this. So if I get a little speculative as the paragraphs wear on, just chalk it up to compensating for the opportunity cost of being in Rio de Janeiro in late summer, and having to forego the pleasure of far niente for the task of blogging on the subject of powerful P-5 countries finessing their compliance with multilateral nuclear trade here in Ipanema, 28 degrees C and fair, and my options are to go back to the beach or blog this.

Chashma 3

So if I get a little speculative as the paragraphs wear on, just chalk it up to compensating for the opportunity cost of being in Rio de Janeiro in late summer, and having to forego the pleasure of far niente for the task of blogging on the subject of powerful P-5 countries finessing their compliance with multilateral nuclear trade controls.

The point of departure is this item by Bill Gertz which appeared on Friday.

My initial reaction to it in print was exactly the same as my reaction to it on the phone a week ago when I heard about it in the same breath as developments at this month’s meeting of the NSG’s Consultative Group in Vienna–I wasn’t certain that there was anything new here.

After all, back in early 2010 CNNC’s most important engineering subsidiary had announced here in fine print that it was going ahead with more power reactor sales to Pakistan and, specifically, for its Chashma site. These would become Chashma-3 and -4 projects a year later. A few countries, including the U.S., during NSG discussions in both 2010 and 2011 queried China about these exports. During the 2010 meetings China had little to say except to urge NSG PGs not to worry because all its trade conformed to NSG guidelines. Into 2011 China let on that it would, as many suspected, argue that these projects were grandfathered by a previous agreement with Pakistan.

While in Pakistan in 2011, I learned that construction work on C-3 and C-4 had in fact started, with the preparation of the foundations underway. No one in Pakistan said anything to me about planned construction of a fifth reactor at Chashma however they did report that Pakistan dearly wanted China to keep building still more reactors in Pakistan.

Beginning 18 months before Gertz wrote last week that he obtained from the State Department news that China and Pakistan had made a new reactor deal, Pakistan media were already engaged in wishful thinking about Pakistan importing what China hadunwrapped in 2011 as a new 1,000 PWR design based on exclusively Chinese IPR. The IPR issue provoked me to do some thinking the last couple of days about what might be behind this apparently new transaction, assuming that Gertz’ information is correct.

Has China made a contractual commitment to build Chashma-5? If China were to go through with this transaction, the plant would be the fifth unit China builds at Chashma, and the third after China joined the NSG in 2004 on the basis of information China provided NSG PGs that the existing coopertion agreement between China and Pakistan did not expressly commit China to supply more reactors to Pakistan after C-1/2.

Note that this 1000-MW reactor would be built at a site that has two reactors already set up, as well as C-3/4 under construction, plus lot of other nuclear infrastructure. Imagespublished in 2010 led to speculation that new construction activity at Chashma pointed to erection of new administrative buildings as well as a possible plutonium separation plant.

The point is that this site is hardly a pre-2007 Al-Kibar–there’s lots of new aerial images turning up all the time. So, why, pray tell, would China go to the bother of trying to keep an agreement top secret, as Gertz says, to dig more gaping holes in the ground for a 1,000-MW nuclear power plant?

Maybe the deal with Pakistan isn’t final, in which case discretion merely implies that there is more for the two sides to negotiate (and so there really isn’t anything new here). If there is an MOU or something more, China might want it kept secret for a limited period of time if it considered Chashma-5 as a bargaining chip it could use to obtain certain important benefits.

Since the NSG back in 2010 was confronted by the uncomfortable possibility that China would dish the group about further exports to Pakistan–just two years after Beijing relented to the exception to NSG guidelines proposed by the U.S. for India –some people have considered that a possible way out for the NSG and China would be for both to come to an understanding that China would terminate its nuclear power plant commerce in Pakistan with the completion of C-3/4.

That would permit the NSG to bless the exports of C-3/4 and then in effect close the book and prevent what, if left unresolved, would be seen (especially by NPT parties during the 2015 Revcon) as a challenge to the NSG’s credibility.

Now, China might put Chashma-5 on the table, in effect telling the NSG, “Okay, if the PGs want to get Pakistan and China to fix this nuclear trade regime thing, we could constructively participate in that effort on the basis that we build the 1,000-MW reactor in Pakistan.”

What would China get in return for a deal? Maybe two things:

  • a wink and a nod from the U.S. concerning the issue of China’s nuclear trade regime compliance, at a time when the U.S. and China are about to renegotiate a bilateral nuclear cooperation agreement to replace a pact which expires in 2015–and which will be reviewed by the U.S. Congress before it can enter into force.

The point of departure is this item by Bill Gertz which appeared on Friday.

My initial reaction to it in print was exactly the same as my reaction to it on the phone a week ago when I heard about it in the same breath as developments at this month’s meeting of the NSG’s Consultative Group in Vienna–I wasn’t certain that there was anything new here.

After all, back in early 2010 CNNC’s most important engineering subsidiary had announcedhere in fine print that it was going ahead with more power reactor sales to Pakistan and, specifically, for its Chashma site. These would become Chashma-3 and -4 projects a year later. A few countries, including the U.S., during NSG discussions in both 2010 and 2011 queried China about these exports. During the 2010 meetings China had little to say except to urge NSG PGs not to worry because all its trade conformed to NSG guidelines. Into 2011 China let on that it would, as many suspected, argue that these projects were grandfathered by a previous agreement with Pakistan.

While in Pakistan in 2011, I learned that construction work on C-3 and C-4 had in fact started, with the preparation of the foundations underway. No one in Pakistan said anything to me about planned construction of a fifth reactor at Chashma however they did report that Pakistan dearly wanted China to keep building still more reactors in Pakistan.

Beginning 18 months before Gertz wrote last week that he obtained from the State Department news that China and Pakistan had made a new reactor deal, Pakistan media were already engaged in wishful thinking about Pakistan importing what China hadunwrapped in 2011 as a new 1,000 PWR design based on exclusively Chinese IPR. The IPR issue provoked me to do some thinking the last couple of days about what might be behind this apparently new transaction, assuming that Gertz’ information is correct.

Has China made a contractual commitment to build Chashma-5? If China were to go through with this transaction, the plant would be the fifth unit China builds at Chashma, and the third after China joined the NSG in 2004 on the basis of information China provided NSG PGs that the existing coopertion agreement between China and Pakistan did not expressly commit China to supply more reactors to Pakistan after C-1/2.

Note that this 1000-MW reactor would be built at a site that has two reactors already set up, as well as C-3/4 under construction, plus lot of other nuclear infrastructure. Imagespublished in 2010 led to speculation that new construction activity at Chashma pointed to erection of new administrative buildings as well as a possible plutonium separation plant.

The point is that this site is hardly a pre-2007 Al-Kibar–there’s lots of new aerial images turning up all the time. So, why, pray tell, would China go to the bother of trying to keep an agreement top secret, as Gertz says, to dig more gaping holes in the ground for a 1,000-MW nuclear power plant?

Maybe the deal with Pakistan isn’t final, in which case discretion merely implies that there is more for the two sides to negotiate (and so there really isn’t anything new here). If there is an MOU or something more, China might want it kept secret for a limited period of time if it considered Chashma-5 as a bargaining chip it could use to obtain certain important benefits.

Since the NSG back in 2010 was confronted by the uncomfortable possibility that China would dish the group about further exports to Pakistan–just two years after Beijing relented to the exception to NSG guidelines proposed by the U.S. for India –some people have considered that a possible way out for the NSG and China would be for both to come to an understanding that China would terminate its nuclear power plant commerce in Pakistan with the completion of C-3/4.

That would permit the NSG to bless the exports of C-3/4 and then in effect close the book and prevent what, if left unresolved, would be seen (especially by NPT parties during the 2015 Revcon) as a challenge to the NSG’s credibility.

Now, China might put Chashma-5 on the table, in effect telling the NSG, “Okay, if the PGs want to get Pakistan and China to fix this nuclear trade regime thing, we could constructively participate in that effort on the basis that we build the 1,000-MW reactor in Pakistan.”

What would China get in return for a deal? Maybe two things:

  • a wink and a nod from the U.S. concerning the issue of China’s nuclear trade regime compliance, at a time when the U.S. and China are about to renegotiate a bilateral nuclear cooperation agreement to replace a pact which expires in 2015–and which will be reviewed by the U.S. Congress before it can enter into force.

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