The merits of going nuclear with China

This column first appeared in Mint, on September 15, 2014. Like other products of the Brookings Institution India Center, this is intended to contribute to discussion and stimulate debate on important issues. The views are solely those of the author.

The maiden visit of Chinese President Xi Jingping to India this week, following close on the heels of Australian Prime Minister Tony Abbot’s visit to India and Prime Minister Narendra Modi’s visit to Japan, has raised expectations of a breakthrough in China-India bilateral relations and the potential for major realignment among Asian powers. Xi’s visit on the eve of Modi’s trip to the US is likely to impact not only India-US relations but also the evolving global order.

Civil nuclear cooperation is a crucial component in three of the four above-mentioned bilateral relations evident in the 2008 US-India agreement, the recently inked Australia-India agreement, and the failed attempt to secure a similar deal with Japan. The exception is China. Although the joint statement following the visit of Chinese Premier Li Keqiang in May 2013 noted that “India and China believe that expansion of civil nuclear energy program is an essential component of their national energy plans to ensure energy security” and that the “two sides will carry out bilateral cooperation in civil nuclear energy in line with their respective international commitments” the Asian neighbours have not embarked on any serious civil nuclear cooperation discussions.

On the face of it China-India civil nuclear cooperation is a non-starter. China and India are nuclear-armed rivals with one of the longest disputed and undemarcated borders. China’s inputs into Pakistan’s nuclear weapons programme and their growing military cooperation is also a bone of contention. Similarly, Beijing’s lack of support for New Delhi’s aspiration to permanently join the United Nations Security Council (UNSC) as well as China’s blocking of India’s membership of the Nuclear Suppliers Group (NSG) are cooperation stoppers. In fact, it was a Chinese-led UNSC resolution that castigated India (along with Pakistan) for its 1998 nuclear tests and nuclear weapons programme.

Yet, there are some merits in going nuclear with China. Consider the following:

China today has one of the most ambitious civil nuclear energy programmes and is building 28 to 30 reactors domestically more than any other country. The sheer number of reactors will provide China with competitive economies of scale. Apart from Pakistan, where China is building upto five nuclear power reactors (much to the chagrin of India), Chinese companies will also invest, design and build two nuclear power reactors in Britain. China has also signed nuclear cooperation deals with Argentina (currently chair of the NSG) and Romania.

Moreover, China’s State Nuclear Power Technology Corporation jointly developed a 1400-1500 MWe pressurised water reactor with Westinghouse (owned by Japan’s Toshiba) based on its AP1000 design. The Westinghouse AP1000 is the same reactor that India is seeking for its Mithivirdi site plant. Thus, a Chinese option might provide an alternative to the stalled US nuclear cooperation and also signal to Japan the missed opportunity of reaching a deal.

Besides, the recently established New Development Bank is a potential source of initial investment to attract Chinese and other capital to fund the building of its plants in India. Clearly, there are economic and technological reasons to consider Chinese reactors.

However, for India civil nuclear cooperation is never only about energy; it is also about India’s role in the emerging global order. Thus, a deal with China is conceivable only if Beijing is willing to unequivocally support a permanent seat for India in the UNSC as well as its membership of the NSG and other export control arrangements. The latter would also facilitate China’s nuclear exports.

While China’s efforts to support India’s membership in the Shanghai Cooperation Organisation and the Asia-Pacific Economic Cooperation are steps in the right direction, they do not go far enough. It is time to start a serious nuclear dialogue.