The US has issued a stark warning to the UK about partnering with China’s largest state-backed nuclear company on a host of new power plants, saying it has evidence that it is engaged in taking civilian nuclear technology and transferring it to military uses.
Christopher Ashley Ford, the US assistant secretary for international security and non-proliferation, said that China General Nuclear (CGN), which is a partner on the £18bn Hinkley Point C nuclear project, among others, was at the forefront of Chinese efforts to militarise civilian nuclear technology.
“It’s quite clear now that essentially the entirety of the Chinese nuclear industry is lashed up with military-civil fusion,” Mr Ford said in a briefing with the Financial Times. “There is a growing pattern of information of which we have become aware over time related to technological theft issues.”
Mr Ford said the US had shared evidence, both “open source” and from intelligence gathering, with the UK, showing CGN was involved in the transfer of technology that could be used for a range of military applications.
That could include powering China’s new breed of nuclear powered submarines, aircraft carriers and “floating nuclear reactors for the ongoing militarisation of the South China Sea”, Mr Ford said.
“If CGN is engaged in helping the Chinese navy . . . with missiles that could presumably be pointed at western capitals, including London . . . It’s worth thinking about whether that’s a particularly good idea,” Mr Ford said.
The bluntly delivered warning comes as UK prime minister Theresa May has tried to increase scrutiny of Chinese investment in key UK infrastructure compared to her predecessor David Cameron, including over involvement in nuclear power plants.
But the US intervention, given their status as the UK’s key military ally, is likely to increase pressure on Downing Street.
The Trump administration is locked in a trade war with China, with tensions ramping up over tariffs and the balance of payments between the two countries.
But the US this month also updated its own policies on civilian nuclear co-operation with China to say that there would be a “presumption of denial” for any US company seeking to transfer technology to CGN or its subsidiaries.
That followed a 2016 indictment of CGN and a US nuclear energy consultant, Allen Ho, who was later sentenced to two years in prison for attempting to bypass export control laws. The US has said it has not been satisfied with CGN’s own engagement on its indictment.
Névine Schepers, a nuclear and non-proliferation research analyst at the International Institute for Strategic Studies, said that trust between the US and China over nuclear issues had been “in short supply” since the indictments against CGN.
“The US is taking a tougher line on exports of sensitive technologies to China, in light of the increasingly close relationship between the Chinese civilian and defence industries,” Ms Schepers said.
A contract between China and Westinghouse Electric Company, the US nuclear engineering group sold by Toshiba to Canadian asset manager Brookfield ; last year, is not, however, broadly affected by the US policy shift, although future deals could be.
The second Westinghouse plant in China started up on Wednesday, 11 years after the deal to build four AP1000 reactors was first signed.
In the UK, Mrs May only gave the go-ahead to EDF’s plans for a new nuclear power station at Hinkley Point in south-west England, a project where CGN has a minority stake, after a special review. Including Hinkley, CGN remains in the running to have an involvement in three out of five prospective UK nuclear projects.
Last month, CGN told the Financial Times that political sensitivities could prompt it to give up the chance to operate a new atomic power plant at Bradwell in Essex, as the group also outlined ambitious plans for an industrial partnership with Britain.
Zheng Dongshan, chief executive of the company’s UK subsidiary, said he understood it would “take time to show the public, the government, they can trust us”. The Bradwell plant in Essex would use CGN’s own reactor technology.
Critics of the US stance against CGN have said that the UK has limited modern nuclear knowhow or technology to steal, hence why it has partnered with China and France’s EDF on a new wave of reactors.
But others have cautioned that allowing CGN’s involvement will see it glean knowledge from its partners and the experience of improving its reactors that could ultimately have military applications.
The UK government defended its position as what it described as “one of the most open economies in the world” saying that foreign investment had created 76,000 new jobs in the past year.
It added: “We welcome Chinese investment but like all inward investment it needs to satisfy our robust legal, regulatory and national security requirements. Decisions on US investment and export policy are a matter for the US government.”
CGN’s UK subsidiary, which is based in central London, declined to comment.
CGN has invested more than £2bn in its British nuclear projects in the past two years, and has committed to spend £9.5bn in this area in total.
Mr Ford said that it was sharing the information with the UK as a key long-term ally. “I hope it was a sobering discussion. But the UK will have to make its own decisions.”
Additional reporting by David Bond in Washington
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