Cooperation between Argentina and China in the area of nuclear energy
By Carla Oliva |
Updated: 2018-11-26 17:09
Editor's note: This article is part of the Policy Preview Report for G20 Summit in Argentina.
Carla Oliva
Nuclear energy is an increasingly important means of meeting the growing electricity needs of our societies. This energy, along with wind, solar and hydro power, can generate electricity without contaminating the environment by avoiding dependence on fossil fuels. The main difference between nuclear energy and the other three options is that it is the only one capable of producing and supplying enormous amounts of electricity on a global scale. For this reason, nuclear energy is key to achieving sustainable development. However, it currently contributes very low percentages to the world’s total electricity consumption. In addition, it faces questions related to its security, punctually due to the potential dangers of an eventual incident.
Argentina has a strong scientific and technological structure in the field of nuclear development for peaceful purposes whose origins date back to the 1950s with the creation of the National Atomic Energy Commission (NAEC).
Despite the marches and counter-marches that followed, around 2003, the nuclear plan was reactivated with the objective of overcoming the effects of the energy crisis that affected the country. As a result, the Atucha II nuclear power plant (which was added to Atucha I and Embalse) was completed and the CAREM reactor was designed and built with proprietary technology. Argentina has come to export facilities, equipment and systems related to nuclear technology through the state-owned company INVAP.
For its part, China, in the framework of its strategy of economic growth, initiated its nuclear program by adapting foreign technology -- in particular French, Canadian and Russian -- and then evolving autonomously based on large investments in research and development. In recent years, Beijing has bet on the nuclear industry as a matter of national security, conceiving it as one of ways to sustain economic growth with a reduction in environmental pollution. China builds more nuclear power plants per year than any other country, mainly because nuclear energy is key to its "green economy" plan that aims to increase the use of non-fossil fuels by 20 percent by 2030.
In 2014, China approved the third-generation Hualong 1 reactor. This high-tech design with entirely Chinese intellectual property is not yet in operation as the reactor, whose containment dome was installed in 2017 at the plant in Fuqing, Fujian province, will be launched in mid-2020.
The rapid advances in the material and the vast domestic market have prompted Chinese authorities to promote the expansion of their nuclear technology on a global scale. Through its economic and political influence, the government supports its state-owned enterprises in their expansion abroad. In addition, it provides financing for the realization of projects through long-term loans, which makes its offers very attractive.
China has great challenges ahead: It must solidify its brand, prove its reliability, respect international standards, exhibit internal and international experience and obtain international approval. As a result, the government has implemented an extremely dynamic policy. The global expansion of its nuclear technology allows China to sit at the table of the great powers, permits it to offer a solution to the difficulties of coupling economic development with environmental protection at lower costs than its competitors and provides an extraordinary source of income.
The nuclear cooperation between Argentina and China dates back to 1985, when they signed the Agreement for Cooperation in the Peaceful Uses of Nuclear Energy. Thirty years later, in February 2015, they signed a new agreement in Beijing, called the Agreement for Cooperation in the Peaceful Uses of Nuclear Technology. While the 1985 agreement laid the foundations for future cooperation, the 2015 agreement was signed within the framework of a prior rapprochement policy aimed at the construction of nuclear power plants with Chinese technology in Argentina. In this sense, it advanced to the point of including cooperation for the transfer of nuclear and non-nuclear material for reactors, equipment, facilities, and technologies. Through this, it provided a legal framework for the agreements that were being negotiated.
This milestone in the cooperation between Argentina and China, unprecedented until now because nuclear energy is still a relatively new technology, began in 2014. That year, the governments of Cristina Kirchner and Xi Jinping signed a framework agreement for the construction of a fourth nuclear power plant in Argentina, the Atucha III, which would be added to the three in operation. This plant would be built with Canadian CANDU technology and Chinese equipment, services, and financing. In November 2015, under the framework of the G20 meeting in Antalya, Turkey, a final version of a framework contract was agreed upon for the construction of a fifth nuclear power plant in Argentina, the Atucha IV, that would be equipped with the Hualong 1 reactor -- which at the time was a prototype, also with Chinese financing.
Argentina became part of the group of countries that relied on Chinese nuclear technology, joining Pakistan, Turkey, South Africa, Romania, and the United Kingdom. Because of this, Argentina acted as an exponent of China's nuclear technology in Latin America. Its relevance lies in the fact that it is a partner with a tradition in the development and application of nuclear technology for peaceful purposes that contributes to the Chinese need to show acceptance and solidify its presence abroad.
Argentina’s presidential elections in December 2015 modified the environment in which contracts with China had been negotiated, not only related to nuclear cooperation, but also to other areas of the bilateral agenda. The triumph of the opposition candidate Mauricio Macri led to a revision and partial adjustment of some of the clauses of the treaties signed by the previous government with Beijing. The agreements for the construction of the nuclear power plants and their progress were now influenced by Argentina’s political decisions and economic conditions.
Thus, in the middle of a strong currency crisis in May 2018 the Argentinian government announced to China the cancellation of the Atucha III project to avoid the indebtedness that its construction would imply. On the other hand, the Atucha IV continues to be the object of negotiations based on the Chinese interest in equipping it with the Hualong 1 reactor and making its nuclear technology visible. In relation to this plant, one of the objectives of Argentina would be to guarantee that it provides 50 percent of the technology and a completely local workforce. Likewise, the government must show an agreement that mitigates the criticism of the scientific field in the face of the budget reduction it faces. According to some information, both countries are planning to sign an agreement after the G20 Summit to be held in November 2018 in Buenos Aires. Just like in 2015, once again a G20 summit will provide a favorable environment for political interaction between the two countries.
These agreements are framed in a context of transition in the international system. It opens new scenarios that will define the configuration of the world order in the coming years. Part of those scenarios include the conflicts between China and the United States. In Latin America, this struggle is visible in the significant Chinese initiatives that compete with the Americans, overcoming the commercial and financial scope when reaching sensitive areas such as nuclear cooperation, which helps China gain influence in the region.
It must be acknowledged that the Chinese government has been pragmatic, considering the difficulties raised from Argentina and renegotiating the agreements, mainly to avoid damaging its goal of internationalizing its nuclear technology. We believe that Argentina must sustain its international commitments by promoting the transfer of technology and knowledge. It is very probable that Argentina and China will reach an agreement to develop nuclear power plants, a fact that would allow us to analyze how Argentina's role evolves as an exponent of nuclear cooperation with China in Latin America and what domestic and international impacts it entails.
Carla Oliva is chair of the China and Argentina Study Group, Rosario National University (UNR) and a senior member of UNR's Center for International Studies. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
Editor's note: This article is part of the Policy Preview Report for G20 Summit in Argentina.
Carla Oliva
Nuclear energy is an increasingly important means of meeting the growing electricity needs of our societies. This energy, along with wind, solar and hydro power, can generate electricity without contaminating the environment by avoiding dependence on fossil fuels. The main difference between nuclear energy and the other three options is that it is the only one capable of producing and supplying enormous amounts of electricity on a global scale. For this reason, nuclear energy is key to achieving sustainable development. However, it currently contributes very low percentages to the world’s total electricity consumption. In addition, it faces questions related to its security, punctually due to the potential dangers of an eventual incident.
Argentina has a strong scientific and technological structure in the field of nuclear development for peaceful purposes whose origins date back to the 1950s with the creation of the National Atomic Energy Commission (NAEC).
Despite the marches and counter-marches that followed, around 2003, the nuclear plan was reactivated with the objective of overcoming the effects of the energy crisis that affected the country. As a result, the Atucha II nuclear power plant (which was added to Atucha I and Embalse) was completed and the CAREM reactor was designed and built with proprietary technology. Argentina has come to export facilities, equipment and systems related to nuclear technology through the state-owned company INVAP.
For its part, China, in the framework of its strategy of economic growth, initiated its nuclear program by adapting foreign technology -- in particular French, Canadian and Russian -- and then evolving autonomously based on large investments in research and development. In recent years, Beijing has bet on the nuclear industry as a matter of national security, conceiving it as one of ways to sustain economic growth with a reduction in environmental pollution. China builds more nuclear power plants per year than any other country, mainly because nuclear energy is key to its "green economy" plan that aims to increase the use of non-fossil fuels by 20 percent by 2030.
In 2014, China approved the third-generation Hualong 1 reactor. This high-tech design with entirely Chinese intellectual property is not yet in operation as the reactor, whose containment dome was installed in 2017 at the plant in Fuqing, Fujian province, will be launched in mid-2020.
The rapid advances in the material and the vast domestic market have prompted Chinese authorities to promote the expansion of their nuclear technology on a global scale. Through its economic and political influence, the government supports its state-owned enterprises in their expansion abroad. In addition, it provides financing for the realization of projects through long-term loans, which makes its offers very attractive.
China has great challenges ahead: It must solidify its brand, prove its reliability, respect international standards, exhibit internal and international experience and obtain international approval. As a result, the government has implemented an extremely dynamic policy. The global expansion of its nuclear technology allows China to sit at the table of the great powers, permits it to offer a solution to the difficulties of coupling economic development with environmental protection at lower costs than its competitors and provides an extraordinary source of income.
The nuclear cooperation between Argentina and China dates back to 1985, when they signed the Agreement for Cooperation in the Peaceful Uses of Nuclear Energy. Thirty years later, in February 2015, they signed a new agreement in Beijing, called the Agreement for Cooperation in the Peaceful Uses of Nuclear Technology. While the 1985 agreement laid the foundations for future cooperation, the 2015 agreement was signed within the framework of a prior rapprochement policy aimed at the construction of nuclear power plants with Chinese technology in Argentina. In this sense, it advanced to the point of including cooperation for the transfer of nuclear and non-nuclear material for reactors, equipment, facilities, and technologies. Through this, it provided a legal framework for the agreements that were being negotiated.
This milestone in the cooperation between Argentina and China, unprecedented until now because nuclear energy is still a relatively new technology, began in 2014. That year, the governments of Cristina Kirchner and Xi Jinping signed a framework agreement for the construction of a fourth nuclear power plant in Argentina, the Atucha III, which would be added to the three in operation. This plant would be built with Canadian CANDU technology and Chinese equipment, services, and financing. In November 2015, under the framework of the G20 meeting in Antalya, Turkey, a final version of a framework contract was agreed upon for the construction of a fifth nuclear power plant in Argentina, the Atucha IV, that would be equipped with the Hualong 1 reactor -- which at the time was a prototype, also with Chinese financing.
Argentina became part of the group of countries that relied on Chinese nuclear technology, joining Pakistan, Turkey, South Africa, Romania, and the United Kingdom. Because of this, Argentina acted as an exponent of China's nuclear technology in Latin America. Its relevance lies in the fact that it is a partner with a tradition in the development and application of nuclear technology for peaceful purposes that contributes to the Chinese need to show acceptance and solidify its presence abroad.
Argentina’s presidential elections in December 2015 modified the environment in which contracts with China had been negotiated, not only related to nuclear cooperation, but also to other areas of the bilateral agenda. The triumph of the opposition candidate Mauricio Macri led to a revision and partial adjustment of some of the clauses of the treaties signed by the previous government with Beijing. The agreements for the construction of the nuclear power plants and their progress were now influenced by Argentina’s political decisions and economic conditions.
Thus, in the middle of a strong currency crisis in May 2018 the Argentinian government announced to China the cancellation of the Atucha III project to avoid the indebtedness that its construction would imply. On the other hand, the Atucha IV continues to be the object of negotiations based on the Chinese interest in equipping it with the Hualong 1 reactor and making its nuclear technology visible. In relation to this plant, one of the objectives of Argentina would be to guarantee that it provides 50 percent of the technology and a completely local workforce. Likewise, the government must show an agreement that mitigates the criticism of the scientific field in the face of the budget reduction it faces. According to some information, both countries are planning to sign an agreement after the G20 Summit to be held in November 2018 in Buenos Aires. Just like in 2015, once again a G20 summit will provide a favorable environment for political interaction between the two countries.
These agreements are framed in a context of transition in the international system. It opens new scenarios that will define the configuration of the world order in the coming years. Part of those scenarios include the conflicts between China and the United States. In Latin America, this struggle is visible in the significant Chinese initiatives that compete with the Americans, overcoming the commercial and financial scope when reaching sensitive areas such as nuclear cooperation, which helps China gain influence in the region.
It must be acknowledged that the Chinese government has been pragmatic, considering the difficulties raised from Argentina and renegotiating the agreements, mainly to avoid damaging its goal of internationalizing its nuclear technology. We believe that Argentina must sustain its international commitments by promoting the transfer of technology and knowledge. It is very probable that Argentina and China will reach an agreement to develop nuclear power plants, a fact that would allow us to analyze how Argentina's role evolves as an exponent of nuclear cooperation with China in Latin America and what domestic and international impacts it entails.
Carla Oliva is chair of the China and Argentina Study Group, Rosario National University (UNR) and a senior member of UNR's Center for International Studies. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
