The two countries will proceed on the bilateral deal, which will supply two more 300 MWe Pressurized Water Reactors to complement the two already in operation at Chashma, without seeking a waiver from the Nuclear Suppliers Group. Current NSG rules, which came into effect in 1992, prohibit any trade between a member of the group and a country that does not have its nuclear activities under full IAEA safeguards (such as Pakistan) unless specifically cleared by consensus in the NSG. It is precisely such a blanket clearance that India secured in 2008, which has allowed it to re-enter the world of nuclear trade.
China joined the NSG in 2004. But because civil nuclear cooperation for the Chashma site dates back to a 1985 accord, both sides are portraying this latest agreement not as part of a fresh sale, but instead as a continuation of the original grandfathered treaty. As such, it would lay outside the purview of the NSG rules.
The negotiations for Chashma III & IV had actually been completed in 2007, but at the time China had delayed any further implementation out of deference to objections from the Bush administration, which was leaning heavily on the Pakistanis for access to A.Q Khan at the time. Now, however, China is determined to push through with the deal, in yet another display of international confidence in the wake of the global financial crisis.
Current circumstances may also make the Obama administration less inclined to press Pakistan and China on this issue, given considerations over the impending American drawdown in Afghanistan and negotiations at the U.N. Security Council over a new round of sanctions on Iran.
Washington remains unable to offer Pakistan a deal similar to the one accorded to India
, due to Pakistan's problematic nonproliferation record as well as its lack of any domestic political or economic constituency in the U.S. Nevertheless, Washington would probably like to maintain a sense of fair play in its dealings with Islamabad on the nuclear front, especially given how important the issue is to the Pakistani leadership. According to a national policy statement revealed by Pakistan at the recently convened nuclear security summit in Washington, "Civil nuclear power generation under IAEA safeguards is an essential part of Pakistan's national energy security plan to support sustained economic growth and industrial development."
For China, the deal is another element in its unfolding geostrategic competition with India in Asia. By going ahead with it at this time, China is reassuring its chief strategic ally in Asia, Pakistan, that Beijing is committed to maintaining the strategic balance in the subcontinent. The move is also in keeping with China's particular profile in the global governance system at the moment. Beijing knows that it cannot deliver a nuclear imprimatur for Islamabad in the way that Washington did for New Delhi. Nevertheless, the Chashma deal is a way of making it clear that Beijing now has the geopolitical heft to interpret treaties in a manner that advances its interests.
The new agreement for Chashma may also foreshadow a new area of competition between India and China. India has developed a credible small-reactor industry that is now poised for export to countries such as Kazakhstan. For its part, China is not quite in a position to effectively compete in this sector, as its commercial small-reactor base has been eroded over the years on account of an import-based focus on domestic large-reactor buildup.
However, given the global nuclear revival and the burgeoning demand for small reactors by countries with modest-sized grids, China is keen to leverage its expertise in building small PWRs for strategic and economic gain. Chashma III and IV may therefore be China's first steps toward making a concerted effort in this space. Indeed, Chashma is in all likelihood not just an incubator for technical proficiency, but also a test-bed for the kind of overarching nuclear relationship that China may be able to offer smaller countries in the future. Such a relationship may include a "friendly" financial element, as evidenced by the fact that 82 percent of the $1.91 billion cost of Chashma III & IV will be extended by China to Pakistan as a soft loan for 20 years, with an eight-year grace period.
That sort of infusion is, of course, rather welcome for a cash-strapped and energy-starved Pakistani economy. And while Pakistan's weapons program is a source of national pride, it has been clear for some time that on the civil nuclear side of things, Pakistan will require a fair degree of handholding -- something that China can provide via the "responsible" reactor-by-reactor approach adopted for Chashma.
China has chosen a shrewd, low-cost option to send an important signal about its evolving geopolitical calculus. By infusing much-needed capital and technology into its most important ally, China is sending a message to emerging rival India, while also positioning itself as a "reasonable" global power that can act as a committed player in the geostrategic marketplace.
**Saurav Jha studied economics at Presidency College, Calcutta, and Jawaharlal Nehru University, New Delhi. He writes and researches on global energy issues and clean energy development in Asia. His first book for Harper Collins India, "The Upside Down Book of Nuclear Power," was published in January 2010. He also works as an independent consultant in the energy sector in India. He can be reached at email@example.com.