Monthly Archives: July 2015

How China Plans to Export Nuclear Reactors

Qinshan Nuclear Power Plant, located in Zhejiang China. image from wikipedia

China Power Investment Corporation and State Nuclear Power Technology Corp have officially announced their merger, as Beijing moves to consolidate its nuclear power sector, aiming eventually to export reactors.  China Power producer currently controls about a tenth of China’s nuclear power market, while the State Nuclear was formed in 2007 to handle nuclear technology transferred from U.S.-based Westinghouse Electric Co.

The new company, State Power Investment Corporation, is expected to own assets over 700 billion yuan ($112.94 billion) and to post revenue of over 200 billion yuan annually, state news agency Xinhua said, citing Wang Binghua, the chairman and party secretary of State Power Investment Corporation.

China National Nuclear Power Corp (CNNC) said …that the merger to form State Power Investment Corporation will increase competition between China’s three major nuclear corporations in both domestic and international construction of nuclear infrastructure. The other major player in this sector is China General Nuclear Power Group (CGN).China is contemplating a merger between CNNC and CGN which were set up as rivals to compete for projects at home and overseas but, under government prompting, have cooperated on a single reactor brand, Hualong 1, with the intention of eventually marketing it abroad.

Beijing said in January it would aid the overseas expansion of Chinese firms, in particular in the rail and nuclear power sectors, raising hackles with some trading partners who fear it signals another wave of subsidized Chinese exports.

China nuclear power firms merge to fuel global clout, Reuters, May 30, 2015

Unleashing Iran: the future of nuclear power in Iran

Arak Heavy water nuclear plant, Iran. image from wikipedia

China was expected to build two nuclear power plants for Iran as part of the country’s new nuclear direction under the controversial nuclear deal that was signed July 15, 2015. The plants were set to be located on the Makran coast, near the neighboring Gulf of Oman, Iran’s Atomic Energy Organization head Ali Akbar Salehi announced on July 22, 2015.

Uninhibited by sanctions, Iran announced plans for four new nuclear power plants. Chinese contractors will be building two of the four planned. “We will simultaneously launch construction of four new nuclear power plants in the country in the next two to three years,” Salehi said, according to Indo-Asian News Service. “We plan to engage more than 20,000 workers and engineers in this large-scale construction.”

When it comes to United Nations sanctions, China had always been an advocate for Iran, along with Russia, generally opposing Washington’s proposed restrictions. On July 20, 2015, the United Nations adopted the nuclear deal between Tehran and Washington, after the “P5+1” countries — the U.S., Britain, France, Russia, China and Germany — unanimously approved it, also voting to lift a series of economic sanctions that were previously imposed on Iran.

China has played a unique, hands-on role in the nuclear deal involving Iran’s Arak reactor, which has been described previously as a “pathway” to nuclear weapons for Iran.

“China has put forward the idea of the modification of the Arak heavy water reactor. … This is the unique role China has played in resolving the Iranian nuclear issue,” Chinese Foreign Minister Wang Yisaid in a statement…..  [The nuclear deal]  has also opened up a door to increased business opportunity in Iran, particularly for China.  Following the announcement of the landmark deal, Wang said that China played a pivotal role in negotiations, and he expressed hope that Iran would take part in China’s “one belt, one road” ambition to revive the Silk Road route.

Excerpts from Michelle FlorCruz, Iran Nuclear Deal: China To Build 2 Nuclear Power Plants For Islamic Republic Following Landmark Agreement, International Business Times, July 22, 2015

Full text of Iran Nuclear Deal Signed July 15, 2015
Joint Comprehensive Plan of Action
Annex I: Nuclear-related commitments
Annex II: Sanctions-related commitments
Attachments to Annex II
Annex III: Civil nuclear cooperation
Annex IV: Joint Commission
Annex V: Implementation Plan

The Arms Race: Who Lacks an Indigenous Defense Industry

XM1203 Non-Line-of-Sight Cannon (NLOS-C) prototype in 2009. image from wikipedia

Even though Colombia, Kuwait, Malaysia, Morocco and Singapore have very different perspectives and agendas, they are all expected to sharply increase their defence spending over the next 10 years. Due to the arms race and an increasing threat perception, the effects of the 2008 financial slowdown on defence spending in these transitioning markets are gradually reducing.

“Unlike leading transitioning economies like India, South Korea, Turkey, the United Arab Emirates and Brazil, the five countries selected for this study are still attempting to develop an industrial base …,” said Frost & Sullivan Aerospace & Defence Industry AnalystAlix Leboulanger. “Upon a closer look at these countries’ dynamics, it is found that their political intent is stronger than their financial and infrastructure capabilities.”  Several factors are dampening indigenisation plans. The increasingly competitive marketplace has left little room for emerging local players unless they can distinguish themselves appropriately – for instance, with price in Colombia and technology in Singapore. Moreover, weak market prospects beyond local demand, along with the absence of small- and medium-sized enterprises, have restricted partnership opportunities and transfer-of-technology ventures with foreign companies.

Investing in high-end foreign technology is perceived as the way forward to fulfil three objectives: achieving modernisation programmes, consolidating the domestic industrial base, and providing employment to locals,” explained Leboulanger. “This will require efficient and easily-applicable regulations to create an attractive and stable environment for foreign investments and industrial partnerships. The lack of skilled personnel and infrastructure, also need to be addressed.”… Financial constraints mean that governments will try to reduce armed forces and invest in combat-proven platforms, surplus material and second-hand equipment…

“As a matter of fact Colombia, Kuwait, Malaysia, Morocco and Singapore are expected to spend 21 percent of their total budget, circa 9.77 billion USD per year, on new equipment.”

Combat Readiness Plans Win Over Defence Indigenisation Targets in Select Markets, Finds Frost & Sullivan, PR Newswire, July 22, 2015

White Gloves War: Sanctions against Russia

Laser weapons system use glass.  Glass could be considered dual-equipment.  Pictured here  the Laser Weapon System (LaWS) aboard USS Ponce. Image from wikipedia

Since Russia annexed Crimea last year, it has become almost impossible for scientists in Russia to buy anything in the United States or Japan that has a dual purpose, said physicist Alexander Shilov, who works in the Institute of Laser Physics in Russia’s scientific hub of Akademgorodok, or Academy Town — part of Russia’s third-largest city of Novosibirsk…The U.S. and EU sanctions were designed to halt exports to the Russian defense sector. When announcing a new round of sanctions in July 2014, the European Union noted specifically that they “should not affect the exports of dual-use goods and technology” to Russia for “non-military use.” In reality, many Western companies were so spooked by the sanctions and the penalties they could face for violating them that the door was shut completely, the scientists say….

What’s more, foreign-made equipment is now less affordable for Russian scientists because of the depreciation in the Russian ruble, which lost nearly half of its value since the Crimean annexation.

The scientists’ plight has been compounded by the Kremlin’s own crackdown on Russian private funding of science, stemming from suspicions of Western influence. The government this year labeled the Dynasty foundation, Russia’s largest source of private funding for science, a “foreign agent” — which makes the group vulnerable to an array of surprise checks and audits. It is a Cold War term that carries connotations of spying. The foundation fell afoul of the officialdom because its Russian founder funds the organization from money transferred from his foreign bank accounts.  “If Dynasty was named a foreign agent, then everyone who had contracts with Dynasty is an accomplice of a foreign agent,” said Shilov. “We are all spies now.”

The government has become increasingly suspicious of foreign-funded non-governmental organizations, seeing them as potential agents of a hostile West. Russia has brushed off the sanctions imposed by the United States and European Union, saying that Russia has plenty of resources to replace banned imports with its own production.

Excerpts from  NATALIYA VASILYEVA5, Russian scientists squeezed by sanctions, Kremlin policies, Associated Press, July 20, 2015

Yemen War: the Biggest Benefactor AQAP

Makulla port, Yemen, seized by AQAP. image from wikipedia

Yemen: Local militias backed by Saudi Arabia, special forces from the United Arab Emirates and Al Qaeda Arabian Peninsula (AQAP) militants all fought on the same side this week to wrest back control over most of Yemen’s second city, Aden, from pro-Iranian Houthi rebels, according to local residents and Houthi forces.

The U.S. has backed a Saudi-led coalition that launched airstrikes against the Houthis…. [But at the same time],  the U.S. continues to conduct separate airstrikes targeting AQAP militants in Yemen.  Meanwhile, Saudi-backed militias are spearheading efforts to roll back Houthi gains and reinstate the government that the rebels drove into exile in neighboring Saudi Arabia. But they have turned to Yemen-based al Qaeda in the Arabian Peninsula, or AQAP, for help, according to local residents and a senior Western diplomat. This puts the U.S.-allied Gulf kingdom on the same side as one of the world’s most notorious extremist groups…

The AQAP militants are exploiting the chaos to expand across Yemen, according to Western officials. At the same time, the regional coalition has been criticized for ignoring the group’s territorial gains since the onset of the conflict, while relentlessly targeting Houthi rebels.

The local militias used trucks and weapons supplied by the Saudi-led military coalition to finally push the Houthis out of the Aden ports after a five-month battle, local residents said. AQAP militants celebrated the victory alongside the militias, parading cadavers of Houthis on a main commercial street in the city to a cheering crowd, according to residents and video posted online.

Aden wasn’t the first victory for AQAP in this conflict. In April, the group captured al-Mukalla, the country’s largest eastern seaport. The Saudi-backed militias have also acknowledged that they fought with AQAP against the Houthis in Ataq, the capital of Shabwa province, earlier this year.

Since 2011, the U.S. has spent nearly $500 million to train and equip Yemen’s security forces to battle AQAP. The U.S. has also backed the Saudi-led regional coalition with intelligence and logistical support since it formed in March 2015, imposing a crippling aerial and naval blockade across Yemen.  American officials acknowledge that AQAP is one of the war’s biggest benefactor…

Excerpts from Al Qaeda Helps Saudi-Backed Forces in Yemen Dow Jones Business News, July 16, 2015.

The Lawsuits against Nuclear Power Plants in South Korea

Thyroid cancer

South Korea:  After a medical checkup, Hwang, 67, a resident of Gyeongju, was diagnosed with thyroid cancer and had to have immediate surgery to remove the tumor. Several other people from her village, which is the closest human settlement to the Wolseong nuclear power plant, were also diagnosed with thyroid cancer.  Hwang is among an increasing number of South Koreans who live near the country’s four nuclear power plants and are joining civil suits against the operator of the plants, demanding compensation for cancer and other adverse health effects.

The citizen’s legal actions were prompted by a landmark ruling by the Busan [where the Kori Nuclear Plant is located]  district court October 2014, which ordered Korea Electric Power Corp., the government-owned operator of the nuclear plants, to pay 15 million won (1.68 million yen, or $13,500) in damages to a thyroid cancer patient.  The number of plaintiffs seeking compensation from KEPCO for health damages incurred by radioactive emissions from the plants has now swelled to more than 2,500.   In demanding compensation from KEPCO, she argues that radioactive emissions from the Wolseong nuclear power plant in Gyeongju, with its five reactors, have caused her thyroid cancer.

 

Lawyer Kim Yeong-hui, who has encouraged residents living near nuclear plants to join the litigation, said that epidemiological surveys in South Korea have shown that residents living 5 to 30 km from nuclear power plants have 1.8 times a higher incidence of thyroid cancer than people from other areas.

Excerpt from  AKIRA NAKANO, More residents joining lawsuits seeking damages from South Korean nuclear plants, Asahi Shimbum, July 15, 2015

IMF Won’t Eat its Words: Greek Debt Relief in Need

greek debt crsis third memorandum july 15 2015

International Monetary Fund (IMF) Greece Debt Relief is Needed

The dramatic deterioration in debt sustainability points to the need for debt relief on a
scale that would need to go well beyond what has been under consideration to date—and what
has been proposed by the ESM. There are several options. If Europe prefers to again provide
debt relief through maturity extension, there would have to be a very dramatic extension with
grace periods of, say, 30 years on the entire stock of European debt, including new assistance.
This reflects the basic premise that debt cannot be assumed to migrate back onto the balance
sheet of the private sector at interest rates close to the current AAA rates before debt levels have been brought to much lower levels; borrowing at anything but AAA rates in the near term will bring about an unsustainable debt dynamic for the next several decades. Other options include explicit annual transfers to the Greek budget or deep upfront haircuts. The choice between thevarious options is for Greece and its European partners to decide.

See also The Deep Deformation of Europe by Elli Louka