Explained | Does the China-Pakistan nuclear deal violate global rules?

The story so far: On June 20, China and Pakistan signed an agreement for a 1,200 MW nuclear power plant at the Chashma nuclear complex in Pakistan. The deal, reportedly worth $4.8 billion, comes amid Pakistan facing a dual energy and economic crisis. The latest nuclear deal between China and Pakistan has implications not only for the crisis-hit country, but also for the global governance of nuclear trade, with Beijing proceeding with the recent deal without seeking the necessary exemptions from the Nuclear Suppliers Group (NSG). .

What’s the latest deal?

The Prime Minister of Pakistan, Shehbaz Sharif, witnessed the signing of the agreement for the construction of a 1,200 MW nuclear plant on June 20. This is the fifth reactor of the Chashma nuclear complex (C-5). Financial details have not been released, but Sharif said China had given “special concessions” to finance construction amid Pakistan’s ongoing financial crisis and ongoing negotiations for an International Monetary Fund (IMF) bailout. C-5 will be the largest reactor at Chashma, where China has already built four phases of the complex, with four reactors of around 325 MW each. It will use China’s Hualong One reactor, which has also been installed at two plants in Karachi.

How many other nuclear plants has China built for Pakistan?

Pakistan currently operates six Chinese-built nuclear plants, four smaller reactors at the Chashma complex and two at the Karachi Nuclear Power Plant (KANUPP). Pakistan’s oldest reactor, the Canadian-built KANUPP-1, is now decommissioned, while KANUPP-2 and KANUPP-3 use Chinese 1,100 MW Hualong One reactors. KANUPP-3, with an investment of $2.7 billion, went fully online last year and was hailed by Mr. Sharif for helping alleviate Pakistan’s energy crisis. An agreement for KANUPP-3 was signed in 2013, the year Chinese President Xi Jinping launched his Belt and Road Initiative (BRI) and became a flagship energy project as part of the China-Pakistan Economic Corridor (CPEC). of the BRI.

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According to Pakistan’s Ministry of Energy, facing a continuing power deficit, financial crisis and rising import bills, the country urgently needs to increase the share of renewables and nuclear power. “The energy sector is highly dependent on imported fuel, including oil and LNG, and will continue to depend on its imports due to low internal capacity,” said the 2021-2022 Economic Survey. “Rising oil prices on the world market and the massive depreciation of the Pakistani rupee are making oil imports more expensive, putting pressure on the external sector and increasing the country’s trade deficit.”

The Alternative and Renewable Energy Policy launched in 2019 plans to increase the share of renewables to 30% by 2030. Currently, thermal sources represent 61% of the energy mix, while hydro represents 24%, nuclear the 12% and wind and solar only 3%, according to the 2021-22 Economic Survey. On the nuclear side, the gross capacity of nuclear power plants had increased by 39% per year to 3,530 MW.

What are the broader implications?

China’s civilian nuclear projects with Pakistan have come under scrutiny because the Nuclear Suppliers Group (NSG), which describes itself as a group of nuclear supplier countries “that seeks to contribute to non-proliferation of Nuclear Weapons Through the Implementation of Two Sets of Guidelines for Nuclear Exports and Nuclear-Related Exports”, explicitly prohibits the transfer of nuclear technology by its members to countries that have not signed the Nuclear Non-Proliferation Treaty ( NPT). China joined the 48-member grouping in 2004 and subsequently argued that the Chashma 3 and Chashma 4 reactors were “exempt” under its earlier Chashma agreements with Pakistan that preceded its joining the NSG.

Chinese analysts have now justified continued nuclear trade, despite Beijing’s NSG commitments, by pointing to the India-US nuclear deal. There are, however, significant differences. For one, India and the US had to seek an NSG waiver for their civil nuclear deal, which was awarded in 2008, paving the way for India to enter the global nuclear trade shop.

However, that was only granted after India made a series of commitments, including placing the facilities under International Atomic Energy Agency (IAEA) safeguards, separating civilian and military nuclear programs and a continued moratorium on testing. Neither has China sought such an exemption from the NSG nor has Pakistan made similar commitments. China has suggested that reactors under IAEA safeguards would suffice.

While China had explained its C-4 and C-5 agreements as part of a previous agreement, the KANUPP-2 and KANUPP-3 plants were agreed to in 2013, a decade after their NSG membership. Meanwhile, the long-running negotiations to include India as a full member of the NSG have hit a Chinese wall. A years-long effort, which included talks with China, seemed to run aground in 2015 when Beijing began linking India’s aspirations for NSG membership with Pakistan’s. Experts fear that the latest deals have only further eroded the global rules governing nuclear trade, and also raised questions about the continued relevance and future of the NSG and the governance of global nuclear trade.