Pact Clears Way for Westinghouse to Build Nuclear Plants in China

BEIJING, Dec. 17 -- China and the United States have signed an agreement that paves the way for Westinghouse Electric Co. to build four civilian nuclear reactors in China, a multibillion-dollar coup for U.S. business over French and Russian competitors.

A memorandum of understanding supporting the transfer of nuclear technology to China was signed Saturday by China's minister for the National Development and Reform Commission, Ma Kai, and U.S. Energy Secretary Samuel Bodman.

"This is an exciting day for the U.S. nuclear industry," Bodman said at the ceremony. "It is an example that if we work together, we can advance not only our trade relations but also our common goal of energy security."

The agreement capped several days of top-level trade talks between China and the United States that otherwise yielded few concrete results. It was signed on the sidelines of a closed-door meeting of five major oil-importing nations hosted by China.

Stephen Tritch, Westinghouse's president and chief executive, said that the details of the contract to build facilities at Sanmen, in the eastern province of Zhejiang, and at Yangjiang, in southern China's Guangdong province, have yet to be completed but that it was a multibillion-dollar deal. He said the company wants the plants up and running by 2013.

The agreement, negotiated late into the night Friday, makes Westinghouse's AP1000 -- which relies on gravity rather than mechanical pumps to carry water to a reactor in an emergency -- China's choice for developing its own nuclear industry.

Westinghouse, U.S. engineering and construction services contractor Shaw Group Inc. -- which holds a 20 percent stake in Westinghouse -- and China's State Nuclear Power Technology Co. signed a companion agreement to follow through with negotiations on specific terms for the technology transfer.

According to a statement issued by the Chinese side, the French nuclear group Areva was the second choice, and a competing bid by Russia's Atomstroyexport was apparently rejected.

Both U.S. and French politicians had lobbied hard for the deal. Chinese officials said they chose Westinghouse based on its technology, its agreement on transferring expertise, the style of cooperation and the prospects for developing locally based technology.

The agreement "pushes mankind into a new level of nuclear technology development," said Ma, China's planning minister. "This project will certainly play a very important role in enhancing the cooperative partnership between China and the U.S."

The deal in China will create more than 5,000 jobs in the United States, Bodman said, helping to redress the mammoth U.S. trade deficit, which is on line to exceed last year's record $202 billion.

Westinghouse, which is based in Pittsburgh, was acquired this year by Japan's Toshiba Corp. The company is banking on its AP1000 technology to help lead an atomic-energy renaissance in the United States and the rest of the world.