Author : Manish Vaid

Originally Published 2013-12-16 11:10:13 Published on Dec 16, 2013
China's existing stand of moving ahead with its aggressive stance on nuclear policy clearly stems from Indo-US nuclear deal, which according to China, seriously damages the integrity and effectiveness of non-proliferation thereby setting dangerous precedence for other countries.
China's reactor sale to Pakistan: A nuclear mistake?
" By moving ahead with its plan to sell its nuclear reactors to Pakistan, China has put the cat among the pigeons. The deal between the China and Pakistan is said to be unique on two counts; first, this will constitute the first ever foreign sale by China's indigenous 1,100 MW nuclear reactor series, called Advanced China Pressurised- 1000 (ACP-1000) and second, the same has been smartly re-engineered by China after it got hold of the technology during the first nuclear reactor csale by the US's Westinghouse to them in 2007. The US$9.1 billion deal of two nuclear reactor sale, to be installed in Karachi coast, will be done through 82 per cent financing by China. This sale as claimed by China to be under the grandfathering clause, would be in addition to the sale of nuclear reactors for Chashma 1 and 2, the one which was expressly provided and had been agreed upon in a pre-NSG Sino- Pak nuclear cooperation agreement on May 4, 2004 before China joined the Nuclear Suppliers Group (NSG) in June 10, 2004. But the concern is that China, who, while joining this group has pledged to accept NSG guidelines by not selling any nuclear reactors to Pakistan, has actually contravened the same with this sale of ACP-1000. Though, open assertion behind such deal by China and Pakistan in recent times is linked to Pakistan's severe energy crisis and Chinese Premier Li Keqiang's commitment to support for this cause during his visit to Pakistan further testify this, yet the same is believed to be largely meant to balance India's ties with the US and Japan which are now extending on nuclear energy front as well. In case of Japan, for instance, the article titled, "India gets close to Japan at its own peril", published in Communist Party backed Global Times, clearly pinpoints the Chinese belief of India's strategy of getting closer to Japan as a balancing tactics against China. But, the sketch of China's aggressive posture on its nuclear policy with Pakistan in South Asian region has already been drawn post the Indo-US civil nuclear deal.

China's perception of Indo-US nuclear deal

Renmin Ribao, China's leading political daily, while accusing Washington of being soft on India and deriding the Non-Proliferation Treaty (NPT), stated, "A domino effect of nuclear proliferation, once turned into reality, will definitely lead to global nuclear proliferation and competition."China's concerns are more with India becoming a rising power and Indo-US nuclear deal further strengthens its dream to become a big power. This was aptly stated in People's Daily Online, "...the United States has explicitly proposed in the agreement that it would not hamper or intervene in the development of India's military nuclear plan, which will also help the country to achieve its goals to be a nuclear power". These instances of China's view towards Indo-US nuclear deal was despite of its appreciation of the fact that the same could have the potential to support and strengthen India's energy security. But for India the next goal was to gain a waiver from NSG to carry forward nuclear trade with the US, followed by opening avenues with other nuclear states.

India's NSG waiver and China's role

It took more than three years for the Indo-US civil nuclear deal to come to fruition. The former US President George Bush and India's Prime Minister Manmohan Singh announced their intention to enter into the nuclear agreement in July 18, 2005 and it was only on October 10, 2008, when the deal, also known as 123 Agreement became operational. In this process it had to cross two big hurdles, namely; International Atomic Energy Agency's (IAEA)approval of safeguard agreements with India and granting of waiver by 47-member NSG to access civil nuclear technology and fuel from other countries. It was on August 1, 2008, that IAEA board members paved a way for allowing India to add facilities over time to be placed under IAEA safeguards. This was followed up by the waiver to India on September 6, 2008 with consensus, after China along with few other countries acceded to the same.

Following its concerns on Indo-US civil nuclear deal, China continued to criticise the US efforts to provide a "clean waiver" for India at IAEA and NSG. And despite of the fact China endorsed the deal by saying, 'that it will not stand in India's way in the NSG' while granting waiver to India, the Chinese staged a walkout at the eleventh hour in NSG meeting in Vienna to the displeasure of India. Beijing which later unwillingly took a softer line on such waiver, appealed for similar such favour to Pakistan indirectly as stated by Cheng Jingye, Head of Chinese delegation in NSG meeting, "It is also China's hope that the NSG would equally address the aspirations of all parties for the peaceful use of nuclear power while adhering to the nuclear non-proliferation mechanism".

But given the past nuclear history of Pakistan both the US and NSG have already refused to provide a similar status to Pakistan, hitting hard on the aspirations of China's balancing act in South Asia. It was largely due to such isolation that China agreed on assisting Pakistan in building two more atomic reactors, the Chashma-3 and 4, during the visit of Pakistan's then President Asif Ali Zardari to Beijing in October 2008. This was clearly in response to US repudiation of similar such deal with Pakistan and just a month after NSG granted waiver to India.

The problem thus starts here when Beijing claims that the Chashma-3 and 4 too have grandfathered, as its deal was signed with Pakistan before China become a member of NSG. Mark Hibbs, an atomic energy expert in the Carnegie Endowment for International Peace, states that China's list of nuclear items, which it intends to provide Pakistan did not include additional power reactors beyond those already agreed upon, i.e. Chashma-1 and 2. Therefore, sale of additional reactors to Pakistan was contrary to the guidelines of NSG, and China therefore, ignored taking the permission of all NSG members.

It could be one of these reasons why China is also against India's entry as NSG member as any sale of nuclear material requires approval of each member and India is expected to play a spoil sport for any nuclear exports by China to Pakistan, unless the later too becomes a member of NSG.

Impact of India's recent energy developments

Recent developments around border tensions between India and Pakistan and India's nuclear diplomacy towards countries like Japan and Australia too is shaping China's perception towards India in this region.

India's recent border tensions with Pakistan resulting from consistent ceasefire violation, for instance, has stalled all the Confidence Building Measures (CBM)that had been taken by these countries just before Nawaz Sharif became Pakistan's Prime Minister. Sharif, who at present feels incompetent to stop consistent ceasefire violations, is feeling the heat, particularly after the halt of all crossborder energy trade, which India had offered to Pakistan, amidst its severe energy crisis under CBM mechanism.

This compelled Pakistan to look aggressively towards China for its support towards crippling energy sector, which is in dire straits. China was quick to support Pakistan in its hunt of energy needs and spearheaded its nuclear trade. But it was India's recent diplomatic efforts couple with those of Japan and Australia, which had further repercussions in China's strategy towards its nuclear trade with Pakistan.

With more countries aligning their nuclear interest with India, the Chinese could get more antagonistic towards India and closer to Pakistan on the nuclear front. Further, more than China's relentless support towards Pakistan's nuclear goal, India is worried about nuclear materials going into the hands of terrorists on whom Pakistan has no control. This suspicion intensifies when Pakistan, despite keeping its specific nuclear reactors under IAEA's safeguards, fails to demarcate its civil and nuclear programs. As far as China's support in meeting Pakistan's energy needs, India would hardly be having any problem, as it was already negotiating the energy deals with Pakistan in recent times.

The crux of the problem

In the context of nuclear reactor sale to Pakistan, the crux of the problem lies in the guidelines of the NSG, which has faced consistent challenge, particularly with respect to export of nuclear reactors by China to Pakistan. As mentioned before, China wants Pakistan to have similar status and be at par with India with respect to civil nuclear trade and commerce. India, due to its excellent non-proliferation record has been awarded exemption from NSG from comprehensive safeguards standard.

But India along with the US does not see any reason for granting of a similar status to Pakistan as it cannot be in any way comparable to that of the latter. India's export control framework matches the global standards while its additional commitment places it in"NPT plus" category besides increasing confidence in the international community. India being the only non-NPT country has shown its commitment towards the non-proliferation objective by signing an additional protocol.

But as far as NSG guidelines are concerned it has somehow failed to stop China from exporting nuclear reactors, which cited the grandfather clause to justify its planned assistance to Pakistan's nuclear energy program, particularly in case of Chashma-3 and 4 reactors. Due to inherent ambiguity of being a voluntary multilateral arrangement the guideline itself is not enforceable. It has no mechanism to resolve disputes about differing interpretations of the guidelines and its provisions do not penalise a member country in case it violates those guidelines.

Hopes from new NSG guidelines

However, with new NSG guidelines in place, export of enrichment and reprocessing equipment and technology (ENR) has become conditional. It excludes those countries which don't have catch-all requirement of full scope safeguards and are non-signatory to NPT. This clearly will bring greater degree of control on Sino-Pak nuclear trade. But India due to its waiver from NSG is out of its scope and with assurances of countries like the US and France which keeps India in a unique position which puts to rest India's future nuclear trade concerns. It may be noted that all the safeguards agreements concluded by Pakistan are governed under the Safeguards Document INFCIRC/66/Rev.2, which is a model for countries not party to NPT. This exempts Pakistan from undergoing Comprehensive Safeguards Agreement (CSA). This also allows Pakistan to freely choose the provision of the Additional Protocol, a mechanism enlarging the scope of IAEA to check for clandestine nuclear activities. Therefore, with an introduction of these new guidelines, Pakistan would automatically be placed under CSA, while bringing its civil and nuclear facilities under IAEA safeguards and fulfilling subjective criteria.

(Manish Vaid is a Research Assistant at Observer Research Foundation, Delhi)

Courtesy: India-China Chronicle, November 2013"
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Manish Vaid

Manish Vaid

Manish Vaid is a Junior Fellow at ORF. His research focuses on energy issues, geopolitics, crossborder energy and regional trade (including FTAs), climate change, migration, ...

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