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Serious issues for George Osborne on China’s role in the UK’s nuclear future

Background briefing. How China has been given access to UK energy. REUTERS/China Daily China Daily Information Corp - CDIC

George Osborne will address the Conservative party conference on Monday fresh from a sales trip to Beijing. His efforts to drive more trade between the two nations saw Chinese state-owned companies invited to participate in the development of nuclear generating plants in Britain. They will have the chance to work with French state-owned company, EDF at Hinkley Point, Somerset and will be the sole operators at Bradwell, Essex. The move has already attracted doubts but there are other vital issues that have yet to be aired. These can be crystallised into five clear questions that Osborne and his government must answer.

Safety concerns

Two Chinese companies are involved with Hinkley Point: China National Nuclear Corporation (CNNC) and China General Nuclear Power Corporation (CGN). The latter was responsible, under its previous guise (China Guangdong Nuclear Power) for building and running China’s first nuclear station, Daya Bay, near Hong Kong. It was initially improperly built – with reinforcement rods missing from the concrete base under the reactor – and there have since been reports of minor leakages of radioactive materials (though this is difficult to check, given China’s lack of transparency).

The deeply corrupt environment in which many Chinese companies operate compounds the possibility of these companies being lax on safety measures and it’s simply not good enough to say that Britain has one of the tightest nuclear safety regimes in the world. Confronted with the power of the Chinese government and the British government’s enthusiasm for unceasing flows of Chinese investment, the risk must be that the regulatory agency will be sidestepped or unable to cope.

Who builds what and with which workers?

The public needs to know whether Chinese construction companies will be involved in building Hinkley Point and other power stations and, if so, whether they will seek to use workers from China. Unions have already voiced their own fears and in all cases where state-owned Chinese companies are involved in major civil engineering and other projects (mining, oil drilling etc) – in Africa, Latin America and South Asia, for example – imported Chinese workers are almost invariably preferred to local ones.

We know that if Chinese companies (which again will be CGN and/or CNNC) build and run the proposed Bradwell nuclear station, they will be allowed to use their own reactors (a development from an old French PWR design, initially developed by Framatome, now AREVA). But will they be involved in building the Hinkley Point reactor? The official version is that the reactor will be built by AREVA (as with EDF, another French state-owned company). However, AREVA has a long-standing technology cooperation agreement with CGN. This surely opens up the possibility that the Hinkley reactor will at least in part – for cost reasons – be built in China.

Political and security concerns

Chinese state-owned companies are not like EDF, Deutsch Bahn, SNCF, or any of the other foreign state-owned companies that deliver our electricity, rail services (which, though publically owned, operate rather like private companies). The government seems not to understand (or doesn’t care) that the Leninist nature of the Chinese state means that it’s the Communist Party (CCP), not government agencies, that effectively controls all elements of the state, including state-owned companies.

Topping out. The dome roof of a generator unit is installed at the Tianwan Nuclear Power Plant, in Jiangsu province. REUTERS/China Stringer Network

The dividing line between the CCP and the state is both thin and porous; the former envelops the latter. This means that the £2 billion guarantee – and the undoubtedly far higher sums that will follow – will effectively result in the British taxpayer subsidising the Chinese Communist Party.

One of the companies involved at Hinkley Point – China National Nuclear – produces China’s nuclear weapons. This means that as well as the Communist Party, CNNC is almost certainly controlled by the People’s Liberation Army (as all Chinese military-related companies are). Given geopolitical uncertainty (with rising tensions between China, Japan and the US over China’s territorial claims in the East and South China Seas), allowing such a company anywhere near Britain – not to mention in an industry as strategic as power generation – verges on the insane. Has MI5 been consulted on this, and if it has, what was its advice?

At its heart, the question of Chinese state (and thus Communist Party) involvement in Britain’s power generation, is a matter of national security. In its desire to help financial services (the only economic sector it privileges) penetrate the Chinese market, the government’s nuclear quid pro quo means it is set to embark on a potentially very dangerous path. Had this deal been negotiated by Jeremy Corbyn as prime minister, the media would have been wondering if he were in the pay of the Chinese government. But George Osborne? Surely not.

Osborne may address some of these concerns in Monday’s speech, but it seems unlikely. In any case, before any binding commitments are made, it’s vital that the government’s proposal be opened up to public debate and subject to parliamentary scrutiny.

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