U.S. Conspiracy Charges Spotlights China Nuclear Champion

  • CGN indicted for conspiracy to illegally make nuclear material
  • Company part of venture to develop China's Hualong One unit

A U.S. indictment on charges against China General Nuclear Power Corp. for conspiracy to illegally produce nuclear material is shining a light on one of the Asian country’s leading atomic energy companies and a key player in its effort to export nuclear technology.

The state-owned company, part of a venture designing the country’s first homegrown reactor, was named as conspirator in an indictment unsealed by the U.S. government Thursday. The reactor, known as Hualong One, is the centerpiece of China’s efforts to compete globally against more-established nuclear developers including Toshiba Corp.’s Westinghouse Electric Co. and Paris-based Areva SA.

“They are the largest nuclear power company, but less known compared with big oil, telecom or Internet names,” said Helen Lau, an analyst at Argonaut Securities (Asia) Ltd. in Hong Kong.

China is seeking to shift from being a buyer of foreign technology to developing homegrown expertise it can sell globally. CGN and China National Nuclear Corp. last month established a joint venture to export the technology and the country plans to build about 30 nuclear units by 2030 in Asia and Europe, CNNC chairman Sun Qin said last month, according to China Daily.

Related: U.S. Charges Chinese Nuclear Firm, Engineer With Conspiracy

“We have noted the announcement from the Department of Justice of the U.S. We cannot comment at this stage,” CGN said in an e-mail.

Technical Assistance

The U.S. accused CGN of directing Szuhsiung Ho, a nuclear engineer in the U.S. also known as Allen Ho, to obtain technical assistance from U.S.-based experts related to the development and production of special nuclear material without required authorization from the U.S. Department of Energy. The indictment said the assistance was related to CGN activities including its Small Modular Reactor and advanced fuel assembly program, as well as “verification and validation of nuclear reactor-related computer codes,” according to the indictment.

CGN and Electricite de France SA signed an accord in October to build three nuclear power stations in the U.K., including the 18 billion pound ($25.5 billion) Hinkley plant in southwest England, in exchange for the opportunity to build a Chinese-developed reactor at a separate site. The company may develop a Hualong One reactor at Bradwell in southern England in the future as part of the agreement signed during President Xi Jinping’s visit to the country in October.

AP1000

CGN signed a memorandum of understanding with the Kenyan government in September to build Hualong One reactors and agreed with Romania in November to build two reactors. CNNC has its own projects in Argentina and Pakistan.

The CGN indictment isn’t the first time the U.S. accused China of illegal activity in the nuclear industry. The U.S. charged five Chinese military hackers in 2014 of cyber espionage against U.S. corporations, including Westinghouse.

Between 2010 and 2012, Chinese hackers stole confidential designs and internal communications from Westinghouse’s computer systems while it was engaged in negotiations with an unidentified state-owned company about building four of the American company’s AP1000 reactors, the Justice Department said at the time. The hackers stole internal e-mails in which Westinghouse executives discussed talks with the Chinese company, it said.

Pipe Specifications

The attackers also sought to acquire pipe specifications that “would enable a competitor to build a plant similar to the AP1000 without incurring significant research and development costs,” the 2014 indictment said.

Westinghouse referred questions about the 2014 hacking case to the U.S. Federal Bureau of Investigation and the Justice Department. It referred questions about the most recent case to the FBI.

A spokeswoman for the FBI declined to comment Thursday, referring questions to the Justice Department.

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