President Obama and Chinese President Xi Jinping meet at the U.S. ambassador's residence in The Hague on March 24, 2014. (Saul Loeb/AFP/Getty Images)
  


It seemed like a typical day for President Obama. He taped a TV interview on trade, hosted the champion NASCAR team on the South Lawn and met with the defense secretary in the Oval Office.
Not so typical was something that didn’t appear that day on the president’s public schedule: notification to Congress that he intends to renew a nuclear cooperation agreement with China. The deal would allow Beijing to buy more U.S.-designed reactors and pursue a facility or the technology to reprocess plutonium from spent fuel. China would also be able to buy reactor coolant technology that experts say could be adapted to make its submarines quieter and harder to detect.
The formal notice initially didn’t draw any headlines. Its unheralded release on April 21 reflected the administration’s anxiety that it might alarm members of Congress and nonproliferation experts who fear China’s growing naval power — and the possibility of nuclear technology falling into the hands of third parties with nefarious intentions.
Now, however, Congress is turning its attention to the agreement. The Senate Foreign Relations Committee is set to hear from five Obama officials in a closed-door meeting Monday to weigh the commercial, political and security implications of extending the accord. The private session will permit discussion of a classified addendum from the director of national intelligence analyzing China’s nuclear export control system and what Obama’s notification called its “interactions with other countries of proliferation concern.”
The White House’s willingness to push ahead with the nuclear accord with Beijing illustrates the evolving relationship between the world’s two largest powers, which, while eyeing each other with mutual suspicion and competitiveness, also view each other as vital economic and strategic global partners. The Nuclear Energy Institute, an industry trade group, argues that the new agreement will clear the way for U.S. companies to sell dozens of nuclear reactors to China, the biggest nuclear power market in the world.
Yet the new version of the nuclear accord — known as a 123 agreement under the Atomic Energy Act of 1954 — would give China leeway to buy U.S. nuclear energy technology at a sensitive moment: The Obama administration has been trying to rally support among lawmakers and the public for a deal that would restrict Iran’s nuclear program — a deal negotiated with China’s support.
Administration officials are using arguments similar to those deployed in the debate over Iran. They say the negotiations over the 123 agreement persuaded China to go a “long way” and agree to controls on technology and materials that are tighter than those in the current accord.
Congress can vote to block the agreement, but if it takes no action during a review period, the agreement goes into effect.
If Congress rejects the deal, “that would allow another country with lower levels of proliferation controls to step in and fill that void,” said a senior administration official, who spoke on the condition of anonymity so he could talk more freely. “We go into it with eyes wide open,” he added. “Without it, we would be less able to press the Chinese to do better on this front.”
Although the current nuclear agreement with China does not expire until the end of the year, the administration had to give Congress notice with 90 legislative days left on the clock. Obama also hopes to seal a global climate deal in December featuring China — less than three weeks before the current nuclear accord expires.
Congress isn’t convinced yet.
“We are just beginning what will be a robust review process,” Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.) said in an e-mail. “These agreements can be valuable tools for furthering U.S. interests, but they must support, not undermine, our nation’s critical nonproliferation objectives.”
A quieter submarine?
Henry Sokolski, executive director of the Nonproliferation Policy Education Center, has been urging lawmakers to insist on requiring advance consent for the reprocessing of spent fuel from U.S.-designed reactors into plutonium suitable for weapons. He also is concerned about the sale of certain nuclear energy technologies, especially coolant pumps with possible naval use.
Charlotte-based Curtiss-Wright developed advanced coolant pumps for the U.S. Navy’s submarines. The same plant produces a scaled-up version for the Westinghouse AP1000 series reactors, each of which uses four big pumps. These pumps reduce noises that would make a submarine easier to detect.
That has become a bigger concern since China occupied and started building what looks like a military base on strategic (and disputed) reefs in the South China Sea.
An Obama administration official said the reactor coolant pumps are much too big to fit into a submarine. However, a 2008 paper by two former nuclear submarine officers working on threat reduction said that “the reverse engineering would likely be difficult” but added that “certainly, the Chinese have already reversed engineered very complex imported technology in the aerospace and nuclear fields.”
Sokolski thinks the choice between reactor sales and tighter controls is a clear one. “Since when does employment trump national security?” he asked rhetorically.
The United States has bilateral 123 agreements with 22 countries, plus Taiwan, for the peaceful use of nuclear power. Some countries that do not have such agreements, including Saudi Arabia, Jordan and Malaysia, have expressed interest in clearing obstacles to building nuclear reactors.
China and the United States reached a nuclear cooperation pact in 1985, before China agreed to safeguards with the International Atomic Energy Agency. IAEA safeguards went into force in 1989, but Congress imposed new restrictions after the Chinese government’s June 1989 crackdown on protesters in Tiananmen Square. The 123 agreement finally went into effect in March 1998; President Bill Clinton waived the 1989 sanctions after China pledged to end assistance to Pakistan’s nuclear weapons program and nuclear cooperation with Iran.
In December 2006, Westinghouse Electric — majority-owned by Toshiba — signed an agreement to sell its AP1000 reactors to China. Four are under construction, six more are planned, and the company hopes to sell 30 others, according to an April report from the Congressional Research Service (CRS).
When it comes to nuclear weapons proliferation, China is in a different category from other 123 agreement nations. It first tested a nuclear weapon in 1964 and now has an arsenal of about 250 nuclear warheads. So U.S. concerns have focused more on whether China has transferred technology to other countries.
“Concerns persist about Chinese willingness as well as ability to detect and prevent illicit transfers,” the CRS report said. “Missile proliferation from Chinese entities is a continuing concern.” The United States wants China to refrain from selling missiles capable of carrying nuclear weapons, a payload of 1,100 pounds, as far as 190 miles. A State Department compliance report in 2014 said that Chinese entities continued to supply missile programs in “countries of concern.”
Reprocessing plutonium
Reprocessing is another key issue.
China has a pilot plant engaged in reprocessing in Jiu Quan, a remote desert town in Gansu province. Satellite photos show that it is next to a former military reprocessing plant, according to Frank von Hippel, a Princeton University physics professor who specializes in nuclear arms control. There is not even any fencing between the sites, he says.
“That’s been one of the hang-ups of the [reprocessing] deal” that China has been trying to negotiate with France for several years, von Hippel said.
Sokolski said the agreement proposed by Obama lacks a requirement for explicit, case-by-case U.S. permission for a reprocessing project using American technology or material from U.S. reactors. It gives consent in advance. And he fears that over the 30-year life of the new 123 agreement, China might want to compete with Russian and U.S. arsenals and make more bombs, for which plutonium is the optimal material.
Other weapons experts note that China already has enough surplus highly enriched uranium and plutonium to make hundreds of new bombs. China has indicated that it is interested in reprocessing so it can use plutonium as part of the fuel mix in civilian nuclear power plants. And it must offer the IAEA access.
Von Hippel is still concerned. “So if China right now is the great hope for the future of nuclear energy, soon it will be a major reactor exporter to the extent there’s a market,” he said. “So it’s a proliferation concern, and it’s also a nuclear terrorism concern. The more plutonium there is lying around, the more likely it is that someone will steal it.”
But the most politically sensitive issue in Congress might turn out to be dual-use applications of nuclear reactor parts.
The latest appropriations bill issued by House Armed Services Committee Chairman Mac Thornberry (R-Tex.) last month would require an intelligence assessment of whether there was “minimal risk” that civilian nuclear technology would be diverted to any “foreign state’s nuclear naval propulsion program.”
Rep. Brad Sherman (D-Calif.) said that the bill “doesn’t mention China by name, though I can’t think of another country for which it would be more applicable.” He said, “I would be reluctant to approve a 123 agreement unless I knew that the individual contracts would be properly reviewed.”
A Senate Armed Services Committee aide, who was not authorized to speak on behalf of the committee members and commented on the condition of anonymity, said the Senate would also focus on military applications of reactor technology for submarines, given rising concern about China’s aggressive posture in the South China Sea.
Sen. John McCain (R-Ariz.), chairman of the committee, would not comment for this article, but he has recently questioned continuing engagement with China while it maintains an aggressive approach to regional issues. Last year, he opposed a proposed visit by a U.S. aircraft carrier to a Chinese port; later, Defense Secretary Ashton B. Car­ter said it would not take place. McCain also said it was a mistake to invite China to the 2016 international maritime military exercise in the Pacific known as RIMPAC.
The senior Obama administration official warned that “if we were not to complete an agreement or if restrictions were so onerous, then a lot of the work we’ve done to bring China into the mainstream and understand the programs they’re pursuing would be lost, and meanwhile our commercial interests would also be hurt.”
But the Armed Services Committee aide said: “This is not simply renewing a past agreement. The senators are going to address it in new strategic circumstances.”