Wednesday 30 April 2008

PLA Navy: From 'Green Water' to 'Blue Water'

In the first half of 2002, the attention of Western military specialists was drawn to two large-scale contracts concluded by China and Russia and aimed at PLA (People's Liberation Army) Navy modernization:

1. construction of two Sovremenny-class missile destroyers, for $1.4 billion;

2. construction of eight upgraded Kilo-class diesel-electric submarines, for $1.6 billion.

Indeed, $3 billion in six months is a huge sum of money. However, this represents only a part of the resources directed at PLA Navy (PLAN) modernization. In any case, the rate of PLAN modernization and construction is not inferior to similar rates of the PLA Air Force and air-defense network (described in recently published articles).

General Structure of the Chinese Shipbuilding Industry

Remarkably, China has a comparatively modern shipbuilding industry; this definitely facilitates PLAN development.

In July 1999, China General Shipbuilding Company was divided, for the purpose of "socialist competition" and accelerated development, into China Shipbuilding Industry Group Corp. (SIGC) and China Shipbuilding Heavy Industry Group Corp. (SHIGC).

SIGC includes several large shipbuilding plants in Shanghai and Guangzhou Shipbuilding Plant, producers of diesel engines and other equipment for vessels. SHIGC includes Dalian Shipbuilding Plant, Dalian New Shipbuilding Plant and Qingdao Shipbuilding Plant, producers of diesel engines for vessels, etc.

During the year 2000, SIGC finished construction of 112 civilian vessels, a total of about 2 million tons deadweight. The volume of production and export increased by about 45 percent from the 1999 level.

Shanghai-based Hudong Shipbuilding Plant, Shanghai-based Jiangnan Shipbuilding Plant and the Guangzhou (capital of Guangdong province) Shipbuilding Plant provided more than 80 percent of the finished deadweight. Several vessels have a deadweight of 80,000-100,000 tons each.

The same year, SHIGC finished construction of 72 civilian vessels, a total of about 1.5 million tons deadweight. Dalian Shipbuilding Plant and Dalian New Shipbuilding Plant provided at least 80 percent of the finished deadweight; this included a 300,000-ton oil tanker for Iran.

By mid-2002, total annual capacity of the two Dalian-based plants approached an estimated 5 million tons deadweight.

Together, the two companies constructed, in 2000, civilian ships of about 3.5 million tons total deadweight. This volume approached 4.5 million tons in 2001 and, by preliminary estimate, could surpass 5 million tons in 2002.

In addition, SIGC and SHIGC annually produce several hundred diesel engines of large capacity and much other equipment for vessels, including sophisticated electronics for control and navigation.

According to available data, 50 percent to 60 percent of the finished vessels are exported – to both developing and developed countries. China's shipbuilding industry occupies third place in the world by production volume, after Japan and South Korea. The quality and technological level of Chinese-made civilian vessels are close to world levels.

Particularly powerful is the group of Shanghai-based shipbuilding plants, namely, newly constructed and very advanced Waigaoqiao Shipbuilding Corp., Jiangnan Shipbuilding Corp., Hudong Shipbuilding Corp. and Shanghai Shipbuilding Plant.

By mid-2002, the total annual shipbuilding capacity of these enterprises, belonging to SIGC, reached 3 million tons deadweight (including 1 million tons at Waigaoqiao). They are capable of producing modern tankers and large civilian vessels of all kinds.

In 2001, Jiangnan, Hudong and Shanghai Shipbuilding Plant finished construction of civilian vessels with a total deadweight of 1.8 million tons (600,000 tons more than in 2000), thus constituting 40 percent of China's civilian shipbuilding production.

The same companies are engaged in naval vessel production:

* Two enterprises of SHIGC in Dalian city (Liaoning province) are constructing destroyers. Obviously, the same enterprises are preparing now for the first Chinese aircraft carrier construction. In April 2002, the unfinished aircraft carrier Varyag (purchased by China from Ukraine) arrived in Dalian – for re-equipping into an entertainment vessel or for another purpose? Experts estimate a 50-50 chance for either.

* SIGC enterprises in Shanghai are constructing frigates for PLAN, while SIGC plants in Shanghai, Guangzhou and Wuhan develop and construct diesel-electric submarines.

No doubt the "Dalian group" of SHIGC and the "Shanghai group" of SIGC could easily become powerful producers of modern submarines, destroyers, cruisers, even aircraft carriers – if advanced naval technology is available. However, achievements in civilian shipbuilding cannot be easily converted into naval shipbuilding construction.

Here China still has much to learn from Russia – particularly in low-noise engines, naval electronics and naval weapon systems of all kinds. And that's obviously what is going to take place during 2002-2005: While placing large-scale weapon orders to Russia, the Chinese side obtains broad access to the technology of this weapon manufacturing. In the framework of a $3 billion order for submarines and destroyers, Shanghai and Dalian would get the best Russian technology for naval vessel development and construction.

PLAN by 2006

Recently, the U.S. and Taiwan concluded agreements on the supply of several destroyers and diesel submarines to the Republic of China Navy. As expected, this project will be finished by 2010. However, PLAN intends to accomplish its major upgrading much earlier, by 2005-2006. The details of this transformation – under way already – are given below.

Nuclear submarines:

This item deserves significant attention, despite no "sensational news" in this area – in contrast to construction or purchase of destroyers and diesel-electric submarines for PLAN emerging during the last several months. In this case, silence is dangerous.

Let's look first at Huludao Shipbuilding Plant in Liaoning province. This plant, the only producer of nuclear submarines in China, doesn't belong to SIGC or SHIGC; it is probably directly subordinated to the Chinese Defense Ministry.

Since 1999, the Huludao plant has been engaged in production of new-generation "093 project" nuclear attack submarines and "094 project" ballistic-missile (strategic) submarines. St. Petersburg-based Rubin Design Bureau and some other Russian enterprises are providing all the necessary technology to Huludao.

In summer 2001, one or two newly constructed "093 project" attack submarines participated in Dongshan maneuvers near the coast of Fujian province, about 200 km from Taiwan. By 2006, PLAN could acquire at least four "093 project" submarines, equipped by anti-ship cruise missiles with a range of up to 500 km (somewhat similar to Russia's Granit anti-ship missiles) and land-attack cruise missiles (LACMs) with a range of up to 2,500 km (similar to Russia's Granat LACMs).

Simultaneously, by 2006, China could get one or, more probably, two "094 project" strategic submarines, equipped with JL (Julang or Giant Wave)-2 submarine-launched ballistic missiles (SLBMs) with a range of 10,000 km; this is a submarine-based variety of China's DF-31 ICBM. Several successful tests of these SLBMs – launched in the South China Sea or East China Sea and hitting targets in Xinjiang, at a distance of about 5,000 km – took place in 2001 and in early 2002.

The question is how many Russian-made nuclear submarines will China purchase by 2006?

In June 2001, the Russian state-owned weapon monopoly Rosvoouruzheniye (transformed in late 2001 into Rosoboronexport) published, on its Web site, a large catalog of weaponry available for foreign customers. One item is of special interest (edited):

Project 971 Shuka-B (nuclear) multipurpose attack submarine is capable of striking against groups of hostile ships and against coastal installations. Designated the "Akula" class by the West, this submarine is officially designated Project 971 Shuka B (shuka is an aggressive breed of freshwater pike).

Some 110 meters long, the Akula is double-hulled with considerable distance between the outer and inner hulls to reduce the possible damage to the inner hull. The hull is constructed of low-magnetism steel, is divided into eight compartments, and features a distinctive high aft fin.

The Project 971, using a steel hull, was initiated in 1976 when it became evident that the existing industrial infrastructure was inadequate to mass-produce the expensive titanium hulls of the Project 945 Sierra class. The performance of the Project 971 boats was a close approximation to that of the Project 945 design, though the latter was significantly more expensive to build and maintain. It has 650-mm and 533-mm torpedo tubes that can use mines as well as Granat cruise missiles, anti-submarine missiles and torpedoes.

Unit Cost: $750 Million

Armament: 6x533mm torpedo tubes

Speed: 20 knots (about 36 km per hour)

Build Time: 16 months (from time of signing contract), additional time for delivery.

There were many reports regarding Akula-class submarines purchased for PLAN needs, at the shipbuilding plants in Severodvinsk (near Arkhangelsk city on the White Sea) or Komsomolsk-na-Amure (Khabarovsk region of the Russian Far East) between mid-1999 and early 2001.

Once again, silence regarding this project, in 2001-2002, could be even more dangerous than the exact information. Russian-Chinese military-technological cooperation has produced a series of shocking surprises already. In order to escape one more large-scale shocker, let's assume that, by 2006, PLAN will get two Akula-class nuclear submarines from Russia. This is a very dangerous weapon platform, and the U.S. Navy should be prepared in advance.

In 1999-2000, there were several reports that China will buy two decommissioned Typhoon-class strategic submarines in Russia. However, the authors are inclined to consider this a bluff: The PLA doesn't like old second-hand weapons. Even if Moscow made a corresponding proposal, the Beijing response probably was negative.
New Purchases of Kilo Submarines and Sovremenny Destroyers From Russia

On Jan. 3, 2002, Rosoboronexport signed a contract with the Chinese for $1.4 billion for the construction of two Sovremenny-class destroyers for PLA needs. Let's look again at the Rosvoouruzheniye catalog (text is excerpted):

"Sovremenny Class is a Russian class of destroyers designed to engage hostile ships by means of missile attack, and to provide warships and transport ships with protection against ship and air attack. Intended primarily for anti-ship operations, it was designed to complement anti-submarine warfare (ASW) Udaloy destroyers (of a previous generation). The ships have anti-ship, anti-aircraft, anti-submarine and coastal bombardment capability. The ships, with a maximum displacement of 8,480 tons, are similar in size to the U.S. Navy's Aegis-equipped missile cruisers, and are armed with an anti-submarine helicopter, 48 air defense missiles, 8 anti-ship missile launchers, torpedoes, mines, long-range guns and a comprehensive electronic warfare system.

Unit Cost: $425 Million
Build Time: 15 Months" (end of description)

So, why is China paying Russia $700 million per destroyer?

According to the understanding of the authors, the major reasons are as follows:

1. China's People's Liberation Army Navy (PLAN) intends to obtain these two destroyers as early as possible – ideally by early 2006. PLA strategists know that the probability of a conflict around Taiwan and/or in the South China Sea – with U.S. forces as the major adversary – is growing, and there is no time to waste. That's why PLAN is ready to spend extra money.

2. These destroyers will be equipped with the very best weapon systems available in Russia.

3. Without doubt, in parallel with the two destroyers constructed in St. Petersburg, the shipyards in Dalian city would master the technology for constructing similar (or even better) vessels.

Let's look for the details of these items.

According to Russia's Interfax agency (June 28), the Severnaya Verf (Northern Wharf) shipyard in Petersburg began building the first of two Sovremenny 956EM Project destroyers for China in June 2002. E and M in the project designation stand for "export" and "modernized." Construction of the second destroyer should start at the end of July. The two destroyers are to be completed and delivered to the customer in early 2006.

The ships were developed by the St. Petersburg-based Severnoye (Northern) Design Bureau. Several Russian shipyards competed for the contract, Baltiysky Zavod (St. Petersburg-based Baltic Shipbuilding Plant) and Severnaya Verf shipyards being the principal competitors. Eventually, the order was placed with Severnaya Verf, which was engaged in building two 956E destroyers for PLAN from 1997 to 2000.

The project 956EM destroyers will boast cutting-edge armament assets. This vessel has been designed for countering hostile surface ships and landing craft (its major duty), countering anti-aircraft and anti-missile defenses of combat and transportation ships, providing fire support to landing units, and patrolling and carrying out various missions as part of a formation or separately.

The 956EM destroyer is fitted with advanced missile and artillery assets and torpedo, radar and anti-submarine systems, as well as the Moskit supersonic anti-ship cruise missiles. Length of the destroyer is 150m, and beam is 17m; it is capable of traveling at a speed of 34 knots (60 km per hour). (end of brief description)

Severnaya Verf, indeed, constructed for China two Sovremenny 956E destroyers in 1997-2000. Both destroyers – by 1997 – were about 40 percent ready. The Russian navy – the initial customer – terminated the order due to lack of funds. Severnaya Verf got the new order for the additional two destroyers, to be constructed from scratch, in terribly heavy competition with Baltiysky Zavod (no room here to describe this New Russian-style thriller).

Remarkably, (a) this time, construction should take place much more rapidly (by early 2006 the two destroyers should start service in Qingdao or Zhanjiang naval seaports) and (b) the 956EM destroyers will be much more advanced than the 956E ones; the 'M' means a lot here. According to Western experts, these destroyers – according to their design, at least – are the naval vessels of the 21st century.

And they are incomparably more advanced than two Luhai-class destroyers, the best and largest Chinese-made naval vessels, whose construction was finished in Dalian in 1997 and 2000, respectively (there is some uncertainty regarding the second destroyer).

According to an article in Moscow-based Novyye Izvestiya newspaper (June 27), China is preparing for the American occupation of the naval base at Cam Ranh, Vietnam, recently abandoned by the Russian navy. That's why, according to the Chinese-Russian contract signed on Jan. 3, 2002, Severnaya Verf must produce two Project 956EM ships for PLAN as early as 2005.

The Chinese were primarily attracted by the Moskit anti-ship strike system with its supersonic missiles, which NATO calls the "aircraft-carrier destroyer." Two 956 E destroyers, received in 1999-2000, increased greatly PLAN's capability regarding conflict with U.S. Navy aircraft carrier groups. And there is information that the two new 956EM destroyers, which Severnaya Verf has begun to build, are to be equipped with more improved weapons, namely, Yakhont systems, whose effective range reaches 280 km (as opposed to 100 km for the Moskit missiles).

China's naval strategy is not limited to the struggle over Taiwan. Chinese interests are increasingly shifting south, and the PLAN has been given the mission of defending oil- and gas-rich islands in the South China Sea. (end of article briefs)

Important comment: The Yakhont missile launcher and its anti-ship missile are much more compact than the Moskit (Sunburn) launcher and its missile. That's why it is possible to deploy, on a 956EM destroyer, at least 16 Yakhont systems (up to 24, according to some sources). One 956EM could have the combat potential of two to three 956E destroyers!

As the authors mentioned in the recently published article "Chinese multi-level air-defense network," sometime in April 2002 Russia and China signed a contract to sell two S-300F (RIF) ship-borne anti-aircraft complexes to China for $200 million. Beijing plans to install the RIF complexes, with a 120-km range, on two new-generation missile destroyers to be built in China by 2005.

According to Hong Kong media reports in mid-June, these two destroyers aren't inferior to the Sovremenny 956EM; they will be constructed by "436th plant" (evidently, in Dalian) and use Chinese-made gas-turbine engines of 26,700 kW capacity. Earlier, China had to import these engines from Ukraine; now China is capable of producing them (based on technology from the Ukrainian Zarya Corp.).

There is some speculation (also in the Hong Kong media) that purchasing two 965EM destroyers for $1.4 billion means the delay of the Chinese-made destroyers project. In the authors' opinion, this is absurd. To the contrary, payment of such money to Russia means that China will get every bit of manufacturing technology and use it at its own shipyards.

So, by the beginning of 2006, PLAN could have up to eight comparatively modern missile destroyers: two Luhai, two Sovremenny 956E, two Sovremenny 956EM, and two Chinese-made Sovremenny replicas. This is a great challenge to U.S. aircraft carrier groups.

New-Generation Diesel Electric Submarines

The leading U.S. papers published, in May-June 2002, dozens of reports on a Chinese-Russian contract for PLAN to purchase eight Kilo 636 diesel-electric submarines for $1.6 billion. We'll describe the most remarkable features of this bargain.

1) These submarines are much more advanced than the four Kilo submarines received by PLAN in 1995-98. They are equipped with two new-generation weapon systems:

1. Klub anti-ship cruise missiles with a range up to 200 km; the Klub or 3M54E1 is developed by the Yekaterinburg OKB (Experimental Design Bureau) Novator; no counterpart has been invented in the world. They have three stages: The first two define movement at subsonic speeds, the third goes into operation 20 km from the target at supersonic speed, which guarantees invulnerability from enemy air-defense weapons and destroys the enemy's ship. The Kilo-636 submarine with the Klub system is capable of salvo firing of missiles simultaneously from six torpedo tubes – and not only at surface targets, but also at submarines.
2. The Shkval torpedo, whose speed reaches 100 meters per second. After launch under water, it flies through the air and descends by parachute into the region where the hostile ship was detected and then again travels under water. Under such conditions the commander of the targeted submarine simply cannot perform an anti-torpedo maneuver. Incidentally, the Russian navy has no ships yet with such a weapon. In 2001, China acquired at least 40 Shkval torpedoes from Russia and/or Kazakhstan. It is supposed to use them on "093 project" nuclear submarines also.

2) Just like the Sovremenny 956EM contract, the contract for Kilo submarines caused intense competition among Russian enterprises. This resulted, by early July 2002, in the following: Five submarines will be produced by the Komsomolsk-na-Amure shipbuilding plant (the Khabarovsk region of the Russian Far East), two by the St. Petersburg-based Admiralteisky Verf plant, and one by the Sormovo shipbuilding plant on the Volga river, in the Nizhny Novgorod region. The contract for constructing two submarines will be transferred from the Komsomolsk-na-Amure plant to Northern Machine Building Enterprise (NME) in Severodvinsk city, on the White Sea. That's despite NME having no experience in Kilo submarine construction (in contrast with the other three shipyards), and getting the Kilo submarines from Severodvinsk to China will be very difficult. 3) The authors conclude that, simultaneously with the eight submarines constructed in Russia, at least four submarines of the same kind will be built at China Shipbuilding Industry Group Corp.(SIGC) shipyards in Shanghai, Wuhan or Guangzhou cities. As early as 1997, the Chinese and Russians negotiated for China's purchase of about 10 Kilo submarines in exchange for their manufacturing technology.

In 1999, China finished the construction of a "super-Kilo submarine" – the improved version of China's Song diesel-electric submarine. China already has part of the Kilo construction technology; now SIGC will get the entire technology. 4) The order for eight submarines is distributed between three Russian enterprises, in order to accelerate the project's realization. The Chinese will spare no efforts to get all the submarines by 2006 (despite the contract prescribing project completion by 2007).

Finally, by 2006, PLAN could get an entire fleet of comparatively advanced diesel-electric submarines: three to four Song, four old-generation Kilos, eight new-generation Kilos, and at least four Chinese-made Kilos of the new version. Such a fleet, united with the aforementioned advanced destroyers, could greatly affect the naval balance not only around Taiwan, but in the South China Sea and East China Sea as well.

First Chinese Aircraft Carrier

No information about construction of a Chinese aircraft carrier from scratch is available; however, China now has the Varyag unfinished aircraft carrier.

The latest information about the fate of Varyag could be reduced to the following:

Varyag, after spending 110 days being towed by tugboats through the Black Sea, Mediterranean Sea, Red Sea, Indian Ocean, South China Sea, East China Sea and Yellow Sea, arrived at Dalian seaport in late March 2002. In April-May, the vessel showed no outward signs of becoming "the world's largest floating casino and hotel" (Macao-based company Agencia Turistica bought Varyag from Ukraine under just this pretext, for $20 million, in 1998).

Heavy security measures bar any civilian access to Varyag at the Dalian shipbuilding plant (which of the two plants is unknown). This has fueled speculation, in the Hong Kong and Taiwan media, that Varyag is being used by PLA for the attempt to build its first operational aircraft carrier.

Varyag is stripped of its armaments, it no longer has the nuclear reactors installed earlier by the Ukrainian company Generating Systems of Crimea. Still, the Kuznetsov-class carrier Varyag is 70 percent complete and weighs 33,600 tons.

According to Hong Kong media, it is extremely doubtful that Agencia Turistica will ever turn Varyag into a floating casino. Moreover, this company's owners are closely connected with PLAN. (end of Varyag-related information briefs)

It looks like the probability of Varyag becoming PLAN's first aircraft carrier should be estimated as at least 70 percent. And this also could be accomplished by 2006.

Conclusions

1) The PLA intends to accomplish a major PLAN overhaul by 2006.

2) At that time China will have complete technology for manufacturing advanced submarines and destroyers.

3) The balance of power in East Asia (let alone around Taiwan) would be tilted in favor of China.

China-made Frigate Ready to Set Sail for Pakistan

The launch ceremony of the first China-built F-22P frigate ordered by the Pakistani navy will be held on April 7 2008, in a shipyard in Shanghai.Admiral Muhammad Afzal Tahir, the Pakistani Chief of Naval Staff, said that the deal -- his country's first purchase of a major fighting unit from China -- showcases the navy's confidence in Chinese industry.

"Pakistan and China had maintained sound political and military relations, and Islamabad was ready to work with Beijing to expand the strategic cooperative partnership," said Tahir, on April 4 in Beijing.

Under an agreement signed in April 2005, the deal will include the transfer of Chinese naval shipbuilding technology to Pakistan, besides the building of the frigates. The fourth frigate is expected to be finished in the Karachi Shipyard.

"The importance of the launch extends beyond collaboration in shipbuilding; this will be a catalyst for cooperation in the construction of vessels. It also acts as testimony to the two Asian nations' strong ties in military cooperation, in a broader sense," noted Tahir.

On April 3, Tahir met with General Liang Guanglie, China's Defense Minister, with whom he discussed the deepening exchanges and cooperation between the defense departments and armed forces of the two countries. Liang said the defense departments had maintained long-term exchanges and conducted multilevel cooperation across a wide range of fields.

He also expressed the hope that the two sides would make joint efforts to promote exchanges and bilateral cooperation, and thus consolidate their strategic partnership.

The launch ceremony of the first China-built F-22P frigate ordered by the Pakistani navy will be held on April 7, in a shipyard in Shanghai.

Admiral Muhammad Afzal Tahir, the Pakistani Chief of Naval Staff, said that the deal -- his country's first purchase of a major fighting unit from China -- showcases the navy's confidence in Chinese industry.

"Pakistan and China had maintained sound political and military relations, and Islamabad was ready to work with Beijing to expand the strategic cooperative partnership," said Tahir, on April 4 in Beijing.

Under an agreement signed in April 2005, the deal will include the transfer of Chinese naval shipbuilding technology to Pakistan, besides the building of the frigates. The fourth frigate is expected to be finished in the Karachi Shipyard.

"The importance of the launch extends beyond collaboration in shipbuilding; this will be a catalyst for cooperation in the construction of vessels. It also acts as testimony to the two Asian nations' strong ties in military cooperation, in a broader sense," noted Tahir.

On April 3, Tahir met with General Liang Guanglie, China's Defense Minister, with whom he discussed the deepening exchanges and cooperation between the defense departments and armed forces of the two countries. Liang said the defense departments had maintained long-term exchanges and conducted multilevel cooperation across a wide range of fields.

He also expressed the hope that the two sides would make joint efforts to promote exchanges and bilateral cooperation, and thus consolidate their strategic partnership.

China's aircraft carrier dilemma.

China's national leadership is facing a dilemma that has bedeviled many other powers in modern history. The challenge--an especially difficult one in an era of rapid technological change--is discerning when and how to spend finite military budgets on new technology, organization, doctrine, and force structure. The history of navies trying to anticipate and prepare for the next war is replete with both positive and negative analogies to which Beijing can turn. These include Germany's attempts prior to World Wars I and II to strike the right balance between fleet-on-fleet and guerre de course and missing on both counts; Japan's pattern prior to World War II of innovating with aircraft carriers and amphibious warfare but keeping the battleship firmly at the center of its naval doctrine; and even China's own naval embarrassments in the 1884-85 Sino-French War and the 1894-95 Sino-Japanese War, in which poor standardization, divided political and military leadership, and slow mobilization cost the Qing dynasty two very expensive fleets.

The numerous sources available suggest that these issues weigh heavily on China's naval strategists today. Getting the answers right in the near term will appropriately shape China's force structure and inform training and doctrine in anticipation of the most likely scenarios. Obviously, analyses regarding the nature of the next war, the relative strengths and weaknesses of the possible belligerents, and the characteristics of the likely theater will determine those answers. In other words, strategic focus and concentration on the nature of the next war can spur modernization. Taiwan scenarios certainly dominate Beijing's attention, but while they narrow the decision sets, they do not resolve the central dilemma facing China's maritime strategists.

Of the issues that confront Chinese naval modernization, the most comprehensive and far-reaching is the extent to which Beijing has faced a choice between a navy focused on large-deck aviation and one based fundamentally on submarines. The answer is the simplest possible--not at all. China has yet to confront the issue in any meaningful way, and that is so because its technology, assets, and facilities are far from a state that might force the issue.

Whether it makes sense now for China actually to develop an aircraft carrier has apparently been the subject of considerable debate in China. Hong Kong's Phoenix Television has quoted Song Xiaojun, editor in chief of Jianchuan Zhishi (Naval & Merchant Ships), as stating that a PLA faction advocates aircraft carrier development but must compete with elements urging submarine and aerospace industry development. One Chinese analyst states that Beijing, reflecting the interests of the submarine faction, is currently focused on developing new types of submarines in part precisely because they can attack carrier strike groups (CSGs), presumably those of the United States. Carriers present large targets and have weaker defenses than (and cannot easily detect) submarines. Submarines can attack CSGs with "torpedoes, sea mines, and missiles," thereby rendering sea lines of communications and seaborne trade itself vulnerable to undersea attack. The analyst contends that China's Type 093 and 094 submarines will increase the sea-denial capabilities, strategic depth, coastal defense, and long-range attack capability of the People's Liberation Army Navy (PLAN). In a recent meeting with the authors, a senior Chinese official elaborated that although he had "been an advocate of aircraft carriers for many years because we need them," until recently carriers had "not been the best use of national resources" because China "lacks an escort fleet," thereby making any carrier a vulnerable target. China has therefore invested instead in "submarines, mid-sized ships, and fighters [aircraft]."

At the same time, however, dismissing China's carrier aspirations could be myopic, given its rapid development of all other major aspects of its navy over the past few years. Submarines currently dominate China's naval development, but they might not do so indefinitely. Contending that submarine force development is not a panacea for the PLAN, one Chinese analyst calls for "rethinking the theory that aircraft carriers are useless and [that one should] rely solely on assassin's maces," or asymmetric silver bullet-type weapons: "Allied ASW is very strong.... [T]he U.S. and Japan carefully monitor PLAN submarine activities.... PLAN submarines' 533 mm torpedoes are insufficient to constitute a strong threat to a U.S. aircraft carrier [and] PLAN submarine-carried guided missiles are insufficient to wound an aircraft carrier."

The aforementioned Chinese official stated to the authors in 2006 that "China will have its own aircraft carrier" in "twelve to fifteen years." In 2004, however, he had declared to a group of Western academics that there was an internal political and military consensus that China had no intention of developing an aircraft carrier. When asked to explain this apparent contradiction, the official stated that over the past two years the subject of aircraft carrier development has become a "heated internal debate" in Beijing as Chinese national interests have grown, sea lines of communication have become ever more important, the need to rescue Chinese citizens overseas has become increasingly apparent, and "air coverage" is viewed as an essential component of "balanced naval forces."

China has made great progress in many dimensions necessary to support the development of aircraft carriers, though in some areas it is unclear whether substantial efforts have been made at all. The PLAN's submarine program is far ahead of its carrier (CV) program. In India, by contrast, the CV program is far ahead of the ballistic-missile submarine (SSBN) program; Spain, Japan, and Thailand have carriers though they lack SSBNs entirely, whereas the United Kingdom and France deploy both carriers and SSBNs. The Chinese literature notes all of these potential force structure models and the disparities in capabilities and experience between not merely the PLAN and the world's leading navies, but most notably between the PLAN and its regional peers, the Japan Maritime Self Defense Force (JMSDF) and the Indian navy. In that literature the discussion of submarines, both as machines and as operational and strategic platforms, is much more advanced and grounded in reality than that of carriers--which is still notional, if not romantic, and largely comprises rather generic analyses of possible ship-configuration options. Certainly, there is logic, reinforced by the German and Japanese examples, in not playing to the adversary's strength. If the greater payoff is to be found in an asymmetric "silver bullet" or "assassin's mace" that SS/SSNs or mine warfare seem to offer, why should Beijing invest in a war-fighting specialty--that is, power-projection carrier operations--in which the PLAN is so clearly outmatched by the U.S. Navy and that appears ill suited to China's overall defensive posture? .
This, however, does not mean that the way ahead for the Chinese navy--which currently has a submarine-centered force structure and doctrine--is cast in stone or that the choice need be mutually exclusive. In fact, while submarines seem to be ascendant, the Chinese are still actively engaged with the carrier question and are reframing the terms of the debate. That debate, moreover, has been reinvigorated by recent events, notably the 2004 Southeast Asian tsunami, which the above-cited Chinese official averred had "definitely" changed Chinese thinking about the utility of aircraft carriers, and by the advent of China's eleventh "five-year plan," for the period 2006-10. This paper examines China's progress thus far, the road ahead, and a range of ways in which an aircraft carrier might ultimately fit into the PLAN's emerging order of battle.

CHINA'S CARRIER DEVELOPMENT HISTORY AND FUTURE OPTIONS

The aircraft carrier has long had determined, if not numerous, advocates at the highest levels of the Chinese military. Adm. Liu Huaqing, a student of Soviet admiral Sergei Gorshkov at the Voroshilov Naval Academy in Leningrad (1954-58), championed the aircraft carrier when he became chief of the PLAN (1982-88) and vice chairman of the Central Military Commission (1989-97). "Building aircraft carriers has all along been a matter of concern for the Chinese people," Admiral Liu insisted. "To modernize our national defense and build a perfect weaponry and equipment system, we cannot but consider the development of aircraft carriers."

Liu has been credited with an instrumental role in modernizing China's navy and with conceiving ambitious goals for its future power projection, in the framework of "island chains." Liu and others have defined the First Island Chain, or current limit of most PLAN operations, as comprising Japan and its northern and southern archipelagos (the latter disputed by China), South Korea, Taiwan, and the Philippines. The Second Island Chain, which Liu envisioned as being fully within the scope of future PLAN activities, ranges from the Japanese archipelago south to the Bonin and Marshall islands, including Guam. Some unofficial Chinese publications refer to a "Third Island Chain" centered on America's Hawaiian bases, viewed as a "strategic rear area" for the U.S. military. The ultimate goal is a Chinese navy that can perform a mix of sea denial, area denial, and varying degrees of power projection within and out to these island chains.

In his 2004 autobiography, coverage of which by China's Xinhua press agency implies quasi-official endorsement, Admiral Liu described in some detail his association with, and aspirations for, efforts to develop an aircraft carrier. As early as 1970, Liu "organized a special feasibility study for building aircraft carriers as instructed by the higher authorities and submitted a project proposal to them." In May 1980, Liu became the first PLA leader to tour an American aircraft carrier, USS Kitty Hawk (CV 63). This experience left him "deeply impressed by its imposing magnificence and modern fighting capacity." Liu stated that he emphasized to the PLA General Staff the need to devote great effort to "two large ... key issues" essential not only to "long range combat operations" in "wartime but also to deterrence power in peacetime": development of aircraft carriers and of SSBNs.

Liu recalled that the question of Chinese aircraft development had weighed particularly heavily on him when he became PLAN commander in 1982. "With the development of maritime undertakings and the change in the mode of sea struggles, the threats from sea we were facing differed vastly from the past," Liu assessed. "We had to deal with SSBNs and ship-based air forces, both capable of long-range attacks. To meet that requirement, the strength of the Chinese Navy seemed somewhat inadequate. Despite our long coastal defense line, we had only small and medium-sized warships and land-based air units, which were merely capable of short-distance operations. In case of a sea war, all we could do was to deplore our weakness." But "by developing air carriers," Liu believed, "we could solve this problem successfully."

In early 1984, at the First Naval Armament and Technology Work Conference, Liu recalled stating, "Quite some time has elapsed since the Navy had the idea of building aircraft carriers. Now, our national strength is insufficient for us to do this. It seems that we have to wait for some time." In 1986, however, "when briefed by leaders of the Navy Armament and Technology Department," Liu revisited the issue. "I said that we had to build aircraft carriers," Liu recalled, and that "we must consider this question by 2000. At this stage ... we need not discuss the model of carriers to be built, but should make some preliminary studies." The Gorshkov-educated Liu saw a historical analogue: "The Soviet Union spent 30 years developing carriers. At the beginning, there were different opinions about building carriers. The Central Committee of the Soviet Communist Party did not have a firm determination to do this, but the Soviet people wanted carriers. Shortly afterward, they started building carriers. Judging from our present situation, even for defense purposes only, we are in need of carriers." Following Liu's entreaty, "the leaders of the Navy Armament and Technology Department promptly passed my idea to the Naval Armament Feasibility Study Center. Then, the two departments teamed up to organize a feasibility study in this respect."

Liu suggested that in 1987 China was finally on track to address the "key question" of the carrier platform and its aircraft. On 31 March of that year, he reported to the PLA General Staff that Chinese aviation and shipbuilding industry leaders and experts assessed that their country was "technologically capable of building carriers and ship-borne aircraft." Liu allowed that "with regard to some special installations, of course, there are questions that we must deal with seriously. But they can be solved." Liu suggested that China begin carrier development "feasibility studies in the Seventh Five-Year Plan period, do research and conduct preliminary studies of the platform deck and key questions on the aircraft during the Eighth Five-Year Plan period, and decide on the types and models in 2000."

Liu contended that "the annual spending for the present and the following years will not be too much" and that "technologically [the plan had] many advantages." These included catalyzing "the development of technologies required by the state and by national defense." Moreover, "through the preliminary studies, we can get a deeper understanding of the value of aircraft carriers and the need for their existence in war preparations. This understanding will be conducive to making a final scientific policy decision." Liu maintained that his "report had a certain effect on the PEA General Staff Department and the Commission of Science, Technology, and Industry for National Defense [COSTIND]. After that, the science research units concerned and the Navy's armament department started to make relatively in-depth feasibility studies for developing aircraft carriers under the auspices of [COSTIND]."

Throughout his vigorous promotion of aircraft carriers, Liu insisted, he weighed overall naval and national interests carefully. "During the feasibility studies ... I stressed the need to make a combat cost comparison between using aircraft carriers and ship-borne aircraft and using land-based air divisions, aerial refuellers, and land-based aircraft," he continued. "Later, when I was working with the Central Military Commission, I continued to pay attention to this matter. I asked [COSTIND] and the Armament Department of the PLA General Staff Department to make an overall funding plan for developing carriers, including the funds needed for preliminary studies, research, and armament." Liu stated that the aforementioned plan "should be listed along with the plans for developing warships, aircraft, weapons, and electronic equipment rather than included in the aircraft carrier development program so as to avoid creating an excessively large project that the higher authorities could not readily study. I told them clearly that any plan they made should be discussed by the Central Military Commission."

As for foreign technology, Liu reports,

I gave approval for experts of the Navy and related industries to visit such countries as France, the United States, Russia, and Ukraine to inspect aircraft carriers. During that period, departments related to the national defense industry invited Russian carrier design experts to China to give lectures. Technical materials on carrier designs were introduced into our country, and progress was made in preliminary studies concerning key accessories aboard carriers. Under arrangements made by the PLA General Staff Department and [COSTIND], findings obtained from the inspection trips, materials introduced from abroad, and the results of our own preliminary studies were analyzed, studied, and appraised. This enabled many leaders and experts within and outside the military to enhance their understanding of the large systems engineering [required] for [developing] carriers and ship-borne aircraft....

Tuesday 29 April 2008

secret sanya chinese new nuclear base

China is constructing a major underground nuclear submarine base near Sanya, on Hainan Island off its southern coast, Jane's can confirm.

Although Asian military sources have disclosed this fact high-resolution commercially available satellite imagery from DigitalGlobe allows independent verification of the previous suggestions.

The extent of construction indicates the Sanya base (also known as Yulin) could become a key future base for People's Liberation Army Navy (PLAN) aircraft carriers and other power-projection ships.

Monday 28 April 2008

The Modernization of the Chinese Navy

A number of advanced warships will gradually come into service in the Chinese People's Liberation Army Navy (P.L.A.N.) in the next two years. The bulk of these ships will belong to two new guided missile destroyer classes called 052B and 052C. The 052C will be fitted with an advanced integrated air defense system, supposedly similar to the U.S. Aegis phased-array radar display, with a high capability to engage multiple targets simultaneously.
Evolution of the Chinese Fleet

Chinese shipyards have already completed two 052C class ships, which are expected to be commissioned in 2005. It is probable that P.L.A.N. intends to bring at least six ships of this class into service, deploying them in the three main operative battle groups that form the bulk of Beijing's fleet. This strengthening of forces will constitute a notable improvement in the performance of China's high sea forces. The 052C class warship is equipped with an air defense system based on a sensor apparently similar to the Aegis device and equipped with an HQ9 surface-to-air missile (SAM), considered a long-range vertically launched missile with a 90 km range (56 miles).

The HQ9 will be installed in eight vertical launch system revolver-like stations (six forward, two aft), each with six missiles. Destroyers of this class will also have the capability to conduct long-range surface war missions using two kinds of surface-to-surface missiles (SSMs): the HN3 (a modern cruise missile with a range of 2500 km (1553 miles) capable of delivering a conventional or nuclear warhead) and the YJ12 (a supersonic missile with a range of 200 km (124 miles)). Also, if air defense will be the main duty of 052C class ships, the presence of a variable depth sonar array is expected to give them good anti-submarine warfare performance.

Deployment of this class is proceeding in parallel with the construction and acquisition of a number of new surface and submarine vessels. This emerging situation can suggest some foreign policy scenarios related to Beijing's moves in the next years.

In regards to China's surface fleet (presently consisting of 64 large combatant units: 21 destroyers and 43 frigates), for the next decade Beijing will be committed to the demanding process of replacing obsolete ships, that had for so long reduced the Chinese Navy to a mere coastal fleet, with more modern units. For this reason, P.L.A.N. continues to bring into service units of Russian Sovremenny class destroyers, while pursuing the construction of 052B and 052C class warships, in addition to the construction of a completely new ship, being built in China's Dalian shipyard, that is expected to be very large and loaded with heavy surface armament (probably similar to Russia's Slava class cruisers).

At the moment, the creation of an extensive ship-borne air force by building and deploying aircraft carriers does not seem to have priority in China. Beijing appears more interested in gaining time studying foreign equipment (as the case of the aircraft carrier Varyag, a former Soviet carrier initially acquired from Ukraine, which is badly deteriorated and only 70 percent completed in terms of becoming militarily operational) and then proceeding, in the future and without particular haste, to build its first domestically built aircraft carrier.

For its underwater fleet (presently consisting of 57 units: 51 diesel submarines (SS) and six nuclear powered attack submarines (SSN)), P.L.A.N. is following the same pattern of its surface forces. With significant help from Russia, P.L.A.N. is modernizing the diesel sub fleet as highlighted by the decision to acquire eight other Kilo class boats, following the first four-unit batch purchased during the 1990s; as for Sovremennys, the possibility of having and deploying top units (in their category) will enable the Chinese fleet to achieve a considerable upgrade in both operative effectiveness and technological standards (in particular in the sensor and weapon fields).

P.L.A.N., at the same time, is proceeding with the construction of diesel submarines based on domestic projects (Type 039 and 039A), which has been slowed down by a number of problems discovered in the planning phase. However, in the next few years, this process will give rise to the complete replacement of the large but ineffective diesel submarine force (packed with old Soviet-design vessels) with a modern and efficient diesel fleet. The building of the new SSN Type 93 class is proceeding in the same direction; these vessels, according to P.L.A.N.'s intentions, should allow a significant improvement in Chinese submarine warfare capabilities, especially if the rumors suggesting that the Type 93 class can perform like the Soviet Victor III class or even like the early U.S. Los Angeles class are confirmed.

It is important to note that construction of the new Type 094 nuclear powered ballistic missile class submarines (SSBN) is proceeding very slowly, even if China can now deploy one unit of this kind (Xia-class).
Regional Crisis and the Protection of Sea Lines of Communication

The naval construction plan as a whole indicates that the duties that P.L.A.N. will be called upon to tackle in the next few years will be the protection of sea lines of communication to keep open the "choke points" relevant to China's trade flow, and power projection in areas identified as vital for China's national interests. All these tasks coincide with China's anxiety to acquire and protect the necessary natural resources (especially oil) to sustain the growing energy requirements of its national industrial system. Increased dependence on overseas resources will bring Beijing to require a greater effort by Chinese naval forces to protect the trade flows and show the flag in ports of countries that are considered important trading partners.

Moreover, P.L.A.N. will be required to conduct long-range missions in the open sea to defend exclusive economic zones and to control areas with uncertain sovereignty, as in the case of the Spratley Islands. These isolated islands, situated in the South China Sea, are claimed by China, Malaysia, Indonesia, Vietnam and the Philippines, due principally to the rich oil deposits believed to be located there. The ships commissioned in P.L.A.N. will enable China to conduct missions of this kind, with the aim of deploying a fleet overwhelmingly superior to those of all other Asiatic countries (especially Taiwan) with the exception of the Indian and Japanese navies which Beijing can try, at least, to counterbalance.

The submarine fleet will have the same duties as surface vessels, but is also expected to be assigned the hard task of facing the "traditional" Taiwanese adversary and, supposedly, coping with U.S. battle groups. In fact, it appears that Beijing discarded the possibility of deploying a limited number of aircraft carriers (which would appear excessive in relation to other regional navies) since they would have little hope of prevailing in an engagement with U.S. naval forces. This explains why China's aircraft carrier planning and construction is slowing in pace. Indeed, Beijing now prefers a well-stocked fleet of diesel submarines and nuclear powered submarines to have the difficult role of exerting some deterrence against American ships in case of a crisis.

Following this path, China will rise to a respectable level of underwater power, partially repeating the Soviet strategy during the Cold War. However, unlike the past Soviet submarine fleet (essentially dedicated to attacking N.A.T.O. forces and protecting bastions full of SSBNs), Chinese submarine forces seem to be assigned the role of supporting surface forces -- in their attempts to control sea lines of communication, with the additional mission of trying to exert some form of counter-power against U.S. forces.

In this context, moreover, the Taiwan issue requires careful examination. In fact, the expansion and improvement of the Chinese submarine fleet, especially in diesel submarine numbers, can give Beijing an additional card to play against Taipei under the form of a submarine blockade. Such a blockade is potentially very hard to neutralize and cope with, even for Taiwan's respectable anti-submarine warfare forces; this strategy can exert stronger pressure than diplomatic threats, but is not comparable to a real attempt at invasion, hazardous and hard to carry out -- and also fraught with unforeseeable political and military consequences.
Conclusion

The Chinese fleet's evolution in the coming years suggests that P.L.A.N. will be essentially concerned with protecting sea trade with the aim of assuring an uninterrupted flow of energy resources to satisfy the needs most dependent on overseas resources and to safeguard sea lines of communication. The enlargement and modernization of the Chinese fleet will inevitably alarm the surrounding countries and other regional powers (such as India and Australia) and will oblige other states to renew their surface and submarine forces. However, it appears unlikely that P.L.A.N. can, or will, become a force with global projection (notably far behind the U.S. Navy's capabilities, or those of the Soviet Navy during the 1980s) in the next decade.

The chief missions that P.L.A.N. will be called upon to perform are eminently regional, such as power projection to support claims to areas of dubious sovereignty, but with rich subsoil resources (such as the Spratley Islands), to achieve the same operative capability as the more powerful Asian fleets, and ability to engage such a demanding adversary as the Taiwanese fleet (able to perform at high levels due to continuous acquisition of American equipment). In relation to U.S. Navy battle groups, P.L.A.N. can, at most, aim for the possibility of exerting some form of deterrence (especially through the use of submarine forces), thus refuting all those who, since the beginning of the twenty-first century, have imagined American and Chinese battle groups confronting one another to decide which state will rule over the Pacific Ocean.

Chinese navy starts long march

China is bent on the simultaneous development of both an aircraft carrier and a strategic nuclear submarine, or SSBN. Discussions over which should take priority are over, as a higher military budget allocation has accelerated the People's Liberation Army navy's ambitious plan.

China has been working more than 20 years on building a carrier, according to a memoir written by Liu Huaqing, former commander in chief of the navy. He said the navy had had a special budget for research on carrier technology since the 1980s.

China purchased the abandoned Soviet carrier Varyag from Ukraine in 2000, with the excuse that it intended to turn it into a casino. However, sources in the Ukraine military industry have confirmed in a number of interviews since 2001 that the people who came from China to negotiate the deal were not casino experts. All of them were very familiar with navy technology, however.

Now the Varyag is being repaired and upgraded at a shipyard in China's northeast port of Dalian, painted in the colors of the PLA navy. Most likely its design blueprint was included in the deal when the ship was sold to China. Both Russian and Western military observers have speculated the Varyag will be the platform for training and testing the Chinese navy's carrier.

China has purchased additional carrier-related equipment from Russia and Ukraine, indicating the actual construction of the carrier will begin in the near future.

China purchased four sets of tail-hooks for Su33 ship-borne fighters in 2006, purportedly for experimental purposes. It also imported a whole set of supportive landing and takeoff equipment, including four sets of arresting gear in under-deck space, blocking nets and other equipment. All of these systems were designed by Tsnii Sudavogo Mashinostroenia and produced by the Proletarskii Factory.

The procurement quantity of the above systems offers some clues to the actual scale of the aircraft carrier construction program. The first set of items appears to be intended for structural analysis and future imitation. The second set is intended for various testing activities on Varyag, and the third and fourth will be outfitted on China's indigenous aircraft carriers, which means that the first batch of two carries will enter service in the navy.

The chief designer of Ramensky, V. Kavinskii, disclosed to the author that China had purchased one earlier-version T10K ship-borne test aircraft from Ukraine in 2006. The purpose of importing the abandoned T10K was presumably to study the design of its folding wings, the layout of the tail-hook and the structure of its reinforced landing gear.

China will build its own ship-borne fighter based on the domestically made J11B, which is an upgraded version of a license-production type of Su27SK. The Russian navy's Su33 ship-borne fighter has also been upgraded from the basic Su27S.

As for the submarine, China began sea trials on its first Type 094 Jin class SSBN in 2005. Several official Chinese media have declared that the Type 094 SSBN has been successfully completed. The new generation 094 carries 12 new JL2 submarine-launched ballistic missiles, or SLBMs, with a range of nearly 5,000 miles, which means that 094 would be capable of attacking the major cities in Canada and the United States directly from Chinese territory.

The Chinese navy's next ambition is the design of a still more powerful new type of submarine after the 094. China Central Television has shown a conceptual image of the latest SSBN carrying 24 SLBMs. However, a military official from Taiwan expressed the belief that China would build at least four of the Type 094 SSBNs.

China's purpose in speeding up the simultaneous development of its aircraft carriers and nuclear submarines is not only to be prepared for an attack on Taiwan, but also part of its ambition to become a world-class superpower.

SUPPLY-SIDE EXPLANATIONS OF CHINESE ARMS EXPORTS

The People's Republic of China, like all other states, has exported arms to improve its security, shape the policies of clients, and realize economic gain.
since the founding of the PRC, China has been a regional land power. Beijing's limited ability to project naval and air forces has generally restricted its military influence and most pressing security interests to contiguous areas. Arguably, Chinese gratis arms shipments to Third World nations and resistance movements (especially African) during the 1960's and 1970's could be viewed as furthering its ideologically-based national security strategy as PRC leaders spoke of the developing world constituting "a revolutionary driving force propelling the wheels of history" and serving as "the main force combating colonialism, imperialism, and particularly the super-powers." Yet the rather modest quantities involved suggest more symbolism than substance. In contrast, Chinese arms exports patterns from the mid-1960's until present do reflect an enduring commitment to maintaining favorable military balances against and among its neighbors. The PRC's transfer of weapons to North Korea, North Vietnam (until the collapse of the South), and the Afghan and anti-Vietnamese Cambodian resistance groups (mostly during the 1980's) are indicative of Beijing's willingness to use arms exports to secure its borders against perceived superpower threats.In fact, the PLA's lack of a credible force projection capability has probably made the provision of military hardware one of the most cost-effective means by which the PRC can be a player in regional security affairs. It is more difficult to attribute other major arms transfers to Asian nations to a realistic expectation by China that a key adversary might be weakened in any significant way. It wasn't until eight years after the 1962 Sino-Indian War that the PRC began to provide Pakistan with any appreciable amounts of military equipment, and this being of dubious quality (T-54 tank and MiG-19 fighter equivalents). Although Beijing and Islama-bad did subsequently develop and sustain a substantial arms trade , India, for reasons of geography and capabilities, was never regarded by China's leaders and PLA planners as a serious threat. PRC arms transfers to Thailand are analogous. Beijing had been at war with Hanoi since late-1978, and had made secret arrangements with Bangkok as far back as early-1979 to funnel military aid to the Khmer Rouge. Yet it is not until the late-1980's that sizeable amounts of Chinese ordnance (Type-69 tanks, Type-531 armored personnel carriers, and artillery-all, admittedly, at least as capable as Vietnamese Army equipment) were provided to Thailand. By this time, Vietnam's control over Phnom Penh was clearly slipping. With the possibilities of open Vietnamese-Thai warfare increasing remote, it is unlikely the PRC deemed expanded weapons deliveries to Bangkok as a crucial dimension of its anti-Hanoi strategy.

There are signs, however, that with its growing affluence and military capabilities, China is utilizing arms exports to increase its regional war fighting potential. For example, a reported 1989 $1.2-$1.4 billion arms deal between the PRC and Burma has possibly provided the Chinese Navy with access to a base on Hangyi Island flanking the Bay of Bengal. Rangoon may have also agreed to allow the PRC to set up a monitoring station on Grand Coco Island, just north of India's Andaman Islands in the east Indian Ocean. Moreover, China's continuing supply of naval vessels and aircraft to Bangladesh, North Korea, Pakistan, Sri Lanka, and Thailand throughout the 1980's would seem to point to an effort to expand the list of seaports and air bases available to the PLA Navy and Air Force. Such access, of course, is a sine qua non for China to acquire a regional power projection capability.

A second motivation for supplying arms is to gain influence over the policies of the recipient. There is little evidence of this having been a key factor impelling China's arms exports. The PRC's endeavors to serve as Tanzania's chief weapons supplier during the 1970's and early 1980's do suggest an expectation (realized) that President Julius Nyerere and his military would be more amenable to Beijing's attempts to transship arms to various liberation movements in Angola, Mozambique, and Zimbabwe. Furthermore, military assistance was only one aspect of a multi-dimensional aid program perhaps best symbolized by the Chinese-built 1600-kilometer Tanzania-Zambia railway line, completed in 1976. The intense ideological persuasions of Beijing's leadership during this era resonated with Nyerere's own pan-African aspirations, resulting in a conviction among PRC foreign policy makers that leverage over Dar es Salaam was both attainable and useful. But attainability and utility are measures by which other potential Chinese arms for political influence arrangements fall short, helping to explain their scarcity. Within a competitive market, poor quality lowers demand. In a narrow sense, the PRC has yet to produce the kinds of sophisticated, reliable weaponry that would entice other states to acquire them in return for major policy concessions or adjustments. Furthermore, China has not developed to the stage that it offers potential customers with the depth and breadth of additional benefits available from suppliers such as the United States. For instance, prospective foreign purchasers of United States equipment may be convinced not only by the quality of the particular hardware in question, but also by such factors as impressive and credible American security guarantees, access to much needed technology through offset agreements, and opportunities to study in advanced civil and military institutions. However, even in those instances where the PRC may have a real chance of gaining influence through arms transfers, the rewards would usually fall short of the investment costs. A state may occasionally turn to China as a seller of last resorts, or to supplement their most advanced equipment. Yet the PRC, as a regional power, will only look to arms transactions within Asia as offering meaningful possibilities to attain policy leverage over recipient states. Hence, while the United States, for instance, has equipped the armed forces of key Middle East countries with an eye on shaping their oil production and distribution policies, Beijing's attempts to use of arms for influence have generally been more localized (the Khmer Rouge and possibly Burma, for example).

China, of course, also sells weapons for economic reasons. It was previously noted that market reforms beginning in the late-1970's led to pressures and opened possibilities to enter the global arms market. To understand the stakes involved for the PRC's defense industries and PLA, some comparisons are in order. The value of arms exports as a percentage of total Chinese exports has been significant, but less so in recent years, reaching a high of 6.7% in 1984, and falling to under 1.5% in 1991. But from the more limited perspective of China's defense sector, the value of arms transfers is very substantial. To illustrate, in the mid-1980's, the ratio of the value of U.S. arms exports to total defense spending was just under 4%; for the PRC, the ratio (very roughly estimated) was 7.6%. To be sure, expanding military budgets and declining weapons sales have, in the 1990's, diminished the contribution arms transfers make to PLA modernization efforts. Moreover, the diversification of the former mini-stries of machine building industry factories into the production of civilian goods has probably reduced PRC defense industry dependence on arms sales. A 1992 study, in fact, showed impressive progress in Chinese defense conversion over the past decade.

Nevertheless, the economic motives to sell weapons abroad remain strong. Even if defense conversion is taking place, an aspiring great power like China will still seek an autarkic defense production capability. As such, military and civilian goods output is valued differently. For example, in terms of labor, investment capital, sales, and profits, the Chinese shipbuilding sector in aggregate is far more beholden to civilian than to military orders. Yet, this may be is of little comfort or relevance to the PRC's top party leaders, Central Military Commission (CMC), PLA General Staff and Navy, COSTIND, and shipbuilding military subsector. For this group of actors and institutions, booming sales in commercial vessels may make only marginal contributions to the development of advanced naval shipyards. Their parochial interests lead them to esteem warship production in and of itself because of the resulting increases in R&D, and manufacturing skills and capacities. Hence, to the extent weapons exports help realize these goals, they acquire a worth beyond contract price. In 1992, CMC Vice Chairman Liu Huaqing commenting on defense conversion, noted:

"The building of the weapons industry is an important component of national defense building. It is the first duty of the weapons industry to satisfy the needs of national defense modernization, to safeguard the sovereignty and dignity of the state, and to guarantee smooth progress in socialist modernization. Fighters engaged in the weapons industry must regard the completion of the task of scientific research in and production of military products as the first task and on this foundation, deepen reform, readjust mechanisms, and vigorously do well in converting defense industries to civilian industries while ensuring the development of the weapons industry.
Additionally, the compartmentalization of the PRC defense industry subsectors has most probably led to arrangements that allow much of the profit earned offshore to be retained by the military and relevant manufacturing firms, further elevating the importance of weapons exports. The fact that China is only a second-tier supplier in global arms market, should not obscure the relative magnitude and significance of their sales. For example, the 1987 Sino-Saudi CSS-2 IRBM deal was reportedly worth $3 to $3.5 billion to Beijing. Assuming, conservatively, U.S. military expenditures that year were on the order of twenty-five times larger than the PRC's, then on a proportional basis, an equivalent 1987 American arms sale might have netted between $75 and $87.5 billion. Lastly, the search for technology has occasionally been an important factor motivating particular Chinese weapons sales. Reports since the mid-1970's have claimed PRC deals with, among others, Egypt and Pakistan, to obtain the MiG-23, T-62, Crotale SAM, and Magic AAM for subsequent reverse-engineering. It is reasonable to speculate Beijing looks upon its long-term arms supply relationships with such clients as Cairo and Islamabad as providing the best, and possibly only, access to advanced Western and Soviet weaponry. Given the weakness of its defense R&D and production base, the PRC can be expected to cultivate partnerships that offer good prospects for opportunities to acquire high technology otherwise not available to it.

Drawing on the foregoing discussion, and assuming China's economy and defense industries continue to maintain rapid growth rates, we can infer the following about the direction of its arms sales in the decade ahead:

1) Commensurate with its expanding regional security interests, China will increasingly attempt to become a major arms supplier to Asian states.

2) Although it cannot possibly develop a credible overseas power projection capability in the foreseeable future, the demands of the PRC's burgeoning economy may induce China to selectively sell arms to more distant states in return for preferential trade agreements. For instance, the PRC, as a net importer of oil by the year 2000, could plausibly guarantee favorable Middle East contracts with weapons exports.
3) While, in a macroeconomic sense, the contribution of arms exports to China's trade balance and overall growth will continue to decline in relative terms, great power aspirations and the dynamics of the PRC defense industries will, nevertheless, encourage continued aggressive sales abroad.

Sunday 20 April 2008

chinesearms to sudan


China has shipped its latest-version FN-6 portable ground-to-air missiles to Sudan, video footage of that country's 2007 Independence Day military parade has revealed. These are the most advanced ground-to-air missiles China has introduced to the international market, and the footage is the first evidence that the missiles have actually been exported.

The FN-6, referred to internally by the People's Liberation Army as the HY-6, is equipped with an all-digital infrared seeker. It has a maximum range of 5 kilometers (just over 3 miles), maximum firing latitude of 4 kilometers (2.5 miles), and a response time of 10 seconds. The total weight of the system is 16 kilograms (35 pounds), its flight speed is 600 meters per second (1,342 miles per hour) and maximum maneuverability is 18G.

Recent high-resolution satellite photos also show that Sudan's Wadi Sayyidna Air Force Base is fielded with A-5S attackers and K-8 trainers made by China's Nanhang Aircraft Company. The new satellite images also show that there are two A-5S attackers, one F-7 fighter and one K-8 trainer fielded at the airport. Of course there would be other aircraft anchored inside the hangars, unrevealed by the photographs.

It can now be concluded that the mainstay combat aircraft of the Sudanese Air Force are from China. There has been speculation for quite some time that the Sudanese Air Force was armed with Chinese-made A-5S attackers, but this report has never been confirmed by the Sudanese government or the Chinese authorities. A careful analysis of these images confirms that China has indeed for the first time exported to Northern Africa its latest upgraded attacker.

The A-5S aircraft in Sudan have been coated with the latest camouflage paint, and a total of eight fighter aircraft hangars have been built at the Wadi Sayyidna Air Force Base. Each aircraft hangar can accommodate two to four fighters or attackers, and another eight helicopter hangars have also been constructed at the same airport.

In addition, the satellite photos show that at least nine F-7/MiG-21 and three F-6 fighters have been abandoned at the airport. Two MiG-29s were also found fielded at the same airport, but a source from the Russian military industry says that these fighters were delivered before 2003. Since 2003, the Russian government has prohibited the export of weapons to Sudan.

The A-5 has evolved from the Chinese-made MiG-19 fighter and has undergone new upgrades since 2005. The latest variant of the A-5 is called the A-5G.

It was in 2005 that China and Sudan reached a whole package of military cooperation agreements. These included the sales of at least two A-5 attackers and six K-8 trainers to the Sudanese Air Force, as well as the latest-version T-92 infantry fighting vehicles and T-96 main battle tanks to the Sudanese Army. The best combat units of China's PLA Army did not receive this equipment until after 2000.

The value of the whole 2005 military deal was US$80 million. In the same year, Sudan exported to China 6.6 million tons of crude oil.

The A-5's fuselage is about 25 percent longer than that of the MiG-19. The air intakes are moved from the nose section to the two sides of the fuselage, and the internal fuel tank is redesigned, with a 70 percent greater fuel capacity than that of the MiG-19.

The main equipment fitted on the A-5 includes two 23-millimeter guns, two PL-5 air-to-air missiles, and four 250-kilogram (550-pound) bombs. The attacker has a maximum speed of M1.2 (913 miles per hour) combat radius of 210 kilometers (130 miles) --1 kilometer Hi-Low-Hi -- and a maximum ammunition load of 2,000 kilograms (4,400 pounds).


Thursday 17 April 2008

Anticipating a showdown with Iran, Israel decides secretly to deploy a submarine off its arch-foe's coast.

Anticipating a showdown with Iran, Israel decides secretly to deploy a submarine off its arch-foe's coast.

But how? The quickest route from Israel's Mediterranean coast is via the Suez Canal, which runs through Egypt and which the classified vessels shun. So the submarine is hidden in the belly of a commercial tanker, which delivers it to the Gulf.

Such is the plot of an Israeli thriller, "Undersea Diplomacy". Does it hold water? Perhaps not. Then again, the author, Shlomo Erell, is no mere novelist. He's an ex-admiral with experience in Israel's most sensitive military planning.

"It's pure fiction, but it's informed fiction," he said simply, when asked if his book reflects how the Israeli fleet of Dolphin-class submarines could be used against Iran, whose leadership has called for Israel to be "wiped off the map", stoking international concern over Tehran's nuclear programme.

Israel has three Dolphins, with two more on order from Howaldtswerke-Deutsche Werft, a German shipyard custom-building them at a steep discount as part of Berlin's bid to shore up a Jewish state founded in the wake of the Nazi Holocaust.

The submarines are a subject of deepest secrecy given speculation that they carry nuclear-tipped cruise missiles.

Many analysts believe the Dolphins are Israel's "second strike" weapons, referring to the Cold War theory that a country can deter foes from launching nuclear attacks by maintaining the ability to retaliate, even after its own territory has been laid waste. A nuclear "platform" out at sea is the best guarantee.

Iran denies seeking nuclear weapons, and independent experts say it is years away from any such capability. Some, in turn, think Israel's expanding submarine fleet may be part of preparations to foil the perceived future threat through force.

"There is nothing on the horizon to suggest Iran would have the capability to knock out Israel's nuclear delivery means," said Sam Gardiner, a retired U.S. air force colonel who stages Middle East wargames for U.S. government and private clients.

The Dolphins, he said, may be part of "a conventional capability to deal with the number of targets Israel believes would need to be struck in a conventional preemptive attack".



DISTANCE NO OBJECT?

Israel sent jets to bomb Iraq's nuclear reactor in 1981 and has hinted it could do the same against Iranian facilities if U.S.-led diplomatic pressure failed to rein in Tehran's plans.

But the Iraqi raid was on a single site, relatively close to Israel's borders. Targets in Iran might be too numerous and distant for Israel's air force, especially as intermediate Arab states or Turkey would likely refuse overflight rights.

Israel is assumed to have ballistic missiles, yet its small size may make surprise launches impossible: an unannounced missile test in January became news within minutes as the startled residents of nearby towns reported the roaring takeoff.

Submarines could bridge the gap, especially if positioned in Iranian waters. That possibility has given rise to speculation that Israel wants five Dolphins in order to allow for at least one to be at sea at all times while others are being serviced.

The question remains of how far they might travel.

Israeli navy sources say the Dolphins do not use the Suez -- to avoid being inspected by Egyptian harbourmasters. That means that, to reach the Gulf, Israel would either have to resort to fantastical ruses like the one in "Undersea Diplomacy", or send the submarines around Africa -- a month-long trip at least.

Jason Alderwick, a maritime analyst with the International Institute for Strategic Studies in London, is sceptical.

"I don't buy the idea of a rotation. These submarines have not been purchased with a view to operating in the Gulf," he said. As Dolphins run on conventional rather than nuclear power so require regular refuelling and shore maintenance, he described them as better suited to close Mediterranean missions.

Israel also has access to the Red Sea through Eilat port. But navy sources said there was no plan to dock submarines there because the narrow Red Sea, which is shared with several Arab states, is vulnerable to blockades at the Straits of Tiran.



DETERRENTS NEVER USED

Restricted to the Mediterranean, analysts point out, the Israeli Dolphins could pose a "second-strike" threat to Iran only if they carried nuclear cruise missiles capable of hitting targets as far as 1,500 km (970 miles) away.

Lee Willett of the Royal United Services Institute for Defence and Security Studies noted that Dolphins lacked the vertical tubes used by much bigger Western and Soviet-era submarines to launch ballistic missiles.

Cold War tests showed nuclear warheads are too heavy to be delivered long distances on cruise missiles, so Israel could hit Iran only with conventional warheads if they were fired from the Mediterranean, he said.

A nuclear attack on Iran by a Dolphin, Willett argued, would have to be from the Gulf, which in turn would give away an unsupported submarine's position and probably doom it to being destroyed by surviving Iranian forces.

"The whole point of a deterrent is that it's never used," Willett said. "In designing the Dolphins as a second-strike platform, I imagine the Israelis were thinking 'it's not ideal, but it's the best we've got'."

Israel does not discuss its nuclear capabilities, under an "ambiguity" policy billed as warding off regional enemies while avoiding the kind of provocations that can trigger arms races.

Erell appeared to support such thinking. The message of his book -- which made a modest splash in Israel, and is currently available only in Hebrew -- was "how to use a submarine without resorting to war". "It's about affecting statecraft," he said.

Big hike in Chinese military

China's announced plans to increase its military budget by nearly 18 percent accounts for only part of its actual military spending.Beijing's annual double-digit increases in declared military spending but also the programs that it sees China pursuing.There's a wide range of activities underway.China announced on Tuesday a 17.6 percent increase in defense spending to about 57.2 billion dollars in 2008, which followed a similar increase last year. Chinese officials said it was a moderate increase from a low base.
The Pentagon estimates China's military spending in 2007 was between 97 and 139 billion dollars, well in excess of Beijing's official budgeted figure of 45 billion dollars.
In an annual report to Congress released Monday, the Pentagon said China was fielding and developing an array of modern weapons and military capabilities that were altering regional military balances and have global implications.It raised concerns about a Chinese anti-satellite test in January 2007, and cyberwarfare capabilities.

The report said China has fielded new intercontinental ballistic missiles, acquired cruise and ballistic missiles capable of striking US aircraft carriers from long distances, and continued a steady buildup of short-range missiles opposite Taiwan.

China's foreign ministry attacked the report as a "serious distortion of facts" that "will do no good to our bilateral relations."
there was a significant difference between the Chinese anti-satellite test and the Pentagon's shoot down of a defunct spy satellite last month in that the United States notified the world ahead of time of its plans.

"After all, the United States, as we all recall, back in the mid-80s, did some experiments with ASATs, and essentially walked away from it.

ComStream provides $3.8 million IDR satellite earth station network to Tibetan Post and Telecommunication Administration

ComStream Corp. Tuesday announced that ComStream Canada has been awarded a $3.8 million contract to provide an internal communication network to the Post and Telecommunication Administration of Tibet (PTAT).
The project will interconnect five cities -- Lhasa, LinZhi, ChangDu, NaQu and Ali -- using INTELSAT's Intermediate Data Rate (IDR) service. The network will provide high-capacity digital voice and data communication services to a region where telecommunications is virtually nonexistent.

Li, director of PTAT's Planning Division, stated: ``ComStream has a long history in Tibet because the first earth station in Lhasa was purchased from ComStream in 1984 and has always performed very reliably. In 1993, ComStream upgraded it to an IDR station.''
Li added: ``China's Ministry of Communication (MOC) has a ComStream satellite earth station at Lhasa, as well, which is part of the MOC TDMA network -- considered the world's largest TDMA/DAMA network, while China's National Petroleum Corp. (CNPC) operates a ComStream earth station at NaQu.

``The success of these implementations prompted PTAT to continue its partnership with ComStream. There is a huge potential for satellite communications in Tibet, and we are looking forward to developing more projects in the future with ComStream.''

Tibet has unique religious, political and logistical issues that pose challenges when addressing business and communication requirements. Remote, mountainous locations which have little or no infrastructure support can be reached only by days of driving in ruggedized vehicles.
Li added: ``China's Ministry of Communication (MOC) has a ComStream satellite earth station at Lhasa, as well, which is part of the MOC TDMA network -- considered the world's largest TDMA/DAMA network, while China's National Petroleum Corp. (CNPC) operates a ComStream earth station at NaQu.

``The success of these implementations prompted PTAT to continue its partnership with ComStream. There is a huge potential for satellite communications in Tibet, and we are looking forward to developing more projects in the future with ComStream.''

Tibet has unique religious, political and logistical issues that pose challenges when addressing business and communication requirements. Remote, mountainous locations which have little or no infrastructure support can be reached only by days of driving in ruggedized vehicles

Monday 14 April 2008

Nuclear Power in China



Most of mainland China's electricity is produced from fossil fuels (about 80%, mainly coal) and hydro power (about 18%). Two large hydro projects are under construction: Three Gorges of 18.2 GWe and Yellow River of 15.8 GWe. Rapid growth in demand has given rise to power shortages, and the reliance on fossil fuels has led to much air pollution. The economic loss due to pollution is put at 3-7% of GDP.

Nationally about 508 GWe was installed (15% growth in 2005) and 2475 billion kWh was generated in 2005. In 2006 some 102 GWe of generating capacity was added - a 20% growth, and a further 91 GWe was added in 2007. About three quarters of the power is used in industry. While coal is the main energy source, most reserves are in the north or northwest and present an enormous logistic problem. The State Power Grid Corporation expects to supply 3810 billion kWh in 2010 from 850-900 GWe . Growth is then expected to slow to 2020, when capacity is expected to reach 1330 GWe. At the end of 2007 there was reported to be 145 GWe of hydro capacity, 554 GWe fossil fuel, 9 GWe nuclear and 4 GWe wind, total 713 GWe.

Because of the heavy reliance on old coal-fired plant, electricity generation accounts for much of the country's air pollution, which is a strong reason to increase nuclear share. China is the second-largest contributor to energy-related carbon dioxide emissions after the USA. The IEA (2004) predicted that its share in global emissions - mainly from the power sector - would increase from 14% in 202 to 19% in 2030, but this now looks conservative.

Moves to build nuclear power commenced in mainland China commenced in 1970 and the industry has now moved to a steady development phase. Technology has been drawn from France, Canada and Russia, with local development based largely on the French element. The latest technology acquisition has been from the USA and France.

Nuclear power has an important role, especially in the coastal areas remote from the coalfields and where the economy is developing rapidly. In 2007 it provided 62.86 billion kWh - 2.3% of total, and there is now 8.6 GWe (net) installed.

The government had planned to increase nuclear generating capacity to 40 GWe by 2020 (of total 1000 GWe then), with a further 18 GWe nuclear being under construction then, requiring an average of 2 GWe per year being added. In May 2007 the National Development and Reform Commission announced that its target for nuclear generation capacity in 2030 was 160 GWe. In March 2008 the newly-formed State Energy Bureau (SEB) said that the target for 2020 should be at least 5% of electricity from nuclear power, requiring at least 50 GWe to be in operation by then. Daya Bay reactors are standard 3-loop French PWR units supplied by Framatome, with GEC-Alstom turbines. Electricite de France (EDF) managed construction, starting August 1987, with the participation of Chinese engineers. Commercial operation of the two units was in February and May 1994. There were long outages in 1994-96 when Framatome had to replace major components. Reactor vessel heads were replaced in 2004. The plant produces about 13 billion kWh per year, with 70% transmitted to Hong Kong and 30% to Guangdong.

Lingao phase 1 reactors are virtually replicas of adjacent Daya Bay in Guangdong province. Construction started in May 1997 and Lingao-1 started up in February 2002 entering commercial operation in May. Lingao-2 was connected to the grid about September 2002 and entered commercial operation in January 2003. The two Lingao reactors use French technology supplied by Framatome ANP, but with 30% localisation. They are now designated CPR-1000. They are reported to have cost $1800 per kilowatt.

Daya Bay and Lingao together comprise the "Daya Bay nuclear power base" under the common management of Daya Bay Nuclear Power Operations & Management Co (DNMC), part of China Guangdong Nuclear Power Group (CGNPC).

Qinshan-1, in Zhejiang province 100 km SW of Shanghai, is China's first indigenously-designed and constructed nuclear power plant (though with the pressure vessel supplied by Mitsubishi, Japan). Design was by the Shanghai Nuclear Engineering Research & Design Institute (SNERDI). Construction work spanned 6.5 years from March 1985, with criticality in Dec 1991. It was shut down for 14 months for major repairs from mid 1998.

In October 2007 Qinshan-1 is being shut down for a major upgrade which is expected to take two months - a very short period for what is involved. The entire instrument and control system will be replaced, along with the reactor pressure vessel head and control rod drives. Areva NP is supervising the work, which is likely to lead to life extension beyond the original 30 years.

Qinshan phase 2 (units 2 and 3) are locally-designed and constructed 2-loop reactors, scaled up from Qinshan-1, and designated CNP-600. Unit 2 started up at the end of 2001 and entered commercial operation in April 2002. Unit 3 started up in March 2004, with commercial operation in May 2004.

Qinshan phase 3 (units 4 and 5) use the CANDU 6 Pressurised Heavy Water Reactor (PHWR) technology, with Atomic Energy of Canada (AECL) being the main contractor of the project on a turnkey basis. Construction began in 1997. They are each about 665 MWe net. Unit 4 started up in September 2002 and unit 5 in April 2003.

Tianwan phase 1 at at Lianyungang city in Jiangsu province is a Russian AES-91 power plant (with two 1060 MWe VVER reactors) constructed under a cooperation agreement between China and Russia - the largest such project ever. The cost is reported to be US$ 3.2 billion, with China contributing $1.8 billion of this. The reactors incorporate Finnish safety features and Siemens-Areva instrumentation and control systems. Completion was delayed due to corrosion in the steam generators which resulted in some tubes having to be plugged with a net loss of capacity of about 2%. The first unit was grid connected in May 2006 and put into commercial operation in June 2007. The second was grid connected in May 2007, with commercial operation in August 2007. Design life is 40 years.

Tenth Economic Plan (2001-2005) - stepping up to Generation-3 technology

The 10th 5-year plan incorporated the construction of eight nuclear power plants, though the timeline for contracts was extended. In May 2004 the China National Nuclear Corporation (CNNC) applied to build eight (4 pairs of) new reactors, four of them for China Guangdong Nuclear Power Company (CGNPC):
Lingao phase 2 (Lingdong) in Guangdong province, to duplicate the CPR-1000 Lingao nuclear plant, based on the same Framatome technology as phase 1.
Qinshan phase 4 in Zhejiang province, duplicating the indigenous CNP-600 units, upgraded to 650 MWe.
Sanmen, in Zhejiang province, using advanced foreign technology and design, and
Yangjiang, in Guangdong province, 500 km west of Hong Kong, similarly (originally).

In July 2004 the State Council formally approved the two CPR-1000 units at Lingao.

The two CNP-600 Qinshan units of 650 MWe were subsequently approved and CNNC announced that the next two there would be 1000 MWe indigenous units (now seen as very unlikely or much delayed).

In September 2004 the State Council approved plans for two units at Sanmen, followed by six units at Yangjiang (two to start with), these to be 1000 or 1500 MWe reactors. The Sanmen and Yanjiang plants were subject to an open bidding process for third-generation designs from overseas, with contracts being awarded in mid 2006 - in the event, mid 2007.

This open bidding process underlines the extent to which China is maiking itself part of the world nuclear industry, and yet somewhat ambivalent about that.

While this process was in train over more than two years, the Guangdong Nuclear Power Group signed contracts with Chinese designers and manufacturers for two CPR-1000 reactors as phase 2 of the Lingao power station. Construction started in December 2005 and the 1000 MWe units (based on Lingao phase 1 designs) are due on line in 2010 and 2011. Unit 1 of Lingao phase 2 (Lingdong) will be 50% localised and unit 2 will be 70% localised, under the project management of China Nuclear Power Engineering Corporation (CNPEC), part of CGNPC. Turbine-generator sets are being provided by Alstom.

Construction of Qinshan phase 4 (or second stage of phase II) was formally inaugurated at the end of April 2006, though first concrete had been poured for unit 6 in March. That for unit 7 was poured in January 2007. Local content of the two 650 MWe CNP-600 reactors will be more than 70% and scheduled construction time is 60 months.

Three bids were received for the four Sanmen and Yangjiang reactors: from Westinghouse (AP1000 reactors), Areva (EPR) and Atomstroyexport (V-392 version of VVER-1000). The State Nuclear Power Technology Corporation (SNPTC), directly under China's State Council, is in charge of technology selection for new plants being bid from overseas.

The US, French and Russian governments were reported to be giving firm support as finance and support arrangements were put in place. The US Export-Import bank approved $5 billion in loan guarantees for the Westinghouse bid, and the French Coface company was expected similarly to finance Areva for Framatome ANP's bid. The US Nuclear Regulatory Commission gave approval for Westinghouse to export equipment and engineering services as well as the initial fuel load and one replacement for the four units. Bids for both 2-unit plants were received in Beijing on behalf of the two customers: China Guangdong Nuclear Power Co (CGNPC) for Yangjiang, and CNNC for Sanmen (in Zhejiang province). Bids were for the nuclear portion of each plant only, the turbine tenders to be called for subsequently.

Bids were assessed on level of technology, the degree to which it is proven, price, local content, and technology transfer - which apparently became the major factor. Areva and Westinghouse were short-listed, with their third-generation technology. However, the decision on reactor type was delayed, and came under review at the highest political level, with CNNC evidently pushing for the use of indigenous second-generation designs for both sites.

In December 2006, 22 months after the bids were submitted and after several revisions to them, the Westinghouse AP1000 reactor design was selected for four units at Sanmen and Yangjiang, later changed to Haiyang in the more northerly Shandong province. This will give China a leading position with late 3rd generation reactor technology and provide the platform for China's further nuclear technology development. SNPTC is responsible for all this and is expected to become the licensee for the AP1000 units, the first of which are expected to be operating at Sanmen in 2013. Project control will be with CNNC for Sanmen and China Power Investment Corporation (CPI) for Haiyang.

At the end of February 2007 a framework agreement was signed between Westinghouse and SNPTC specifying Haiyang in Shandong province (see 11th Plan below) as the site of the second pair of AP1000 units, with Sanmen. In April 2007 Westinghouse signed a US$ 350 million contract with Doosan Heavy Industries in Korea for two pressure vessels and four steam generators. Those for the other two AP1000 units are likely to be made in China: the reactor vessels and steam generators by Harbin Boiler Works, First Heavy Machinery Works, or Shanghai Electric Co (SEC). Korea Power Engineering Co. (KOPEC) and Shanghai Nuclear Energy Research & Design Institute (SNERDI) will have major engineering roles.

In July 2007 Westinghouse, along with consortium partner Shaw, signed the AP1000 contracts with SNPTC, Sanmen Nuclear Power Company, Shangdong Nuclear Power Company (a subsidiary of CPI) and China National Technical Import & Export Corporation (CNTIC). Specific terms were not disclosed but the figure of $5.3 billion for the deal was widely quoted. Sanmen site works commenced in February 2008 and full construction for unit 1 is to start in March 2009, with the first power expected late in August 2013.

Choice of steam turbine generators for the four AP1000 units was by CNNC and CPI, not SNPTC. CNNC selected Mitsubishi Heavy Industries and partner Harbin Power Equipment Co as supplier for Sanmen, and CPI selected the same suppliers for Haiyang. This will reportedly boost the capacity of the plants from their designed 1175 MWe to 1250 MWe gross. Siemens, Alstom and Mitsubishi were bidding as subcontractors to Chinese firms. In September 2007 Sanmen Nuclear Power Co signed a $521 million contract for two steam turbine generators of 1200 MWe. In January 2008 Shandong Nuclear Power Co. Ltd ordered the same for Haiyang.

In February 2007 it was reported that EdF had entered a cooperation agreement with CGNPC to build and operate a 2-unit EPR power station. This deal was not expected to involve the technology transfer which is central to the Westinghouse contracts, since the EPR has multiple redundant safety systems rather than passive safety systems and is seen to be more complex and expensive, hence of less long-term interest to China. However, negotiations with Areva and EdF dragged on and in August 2007 it was announced that the EPR project had been shuffled to Taishan so that CPR-1000 units could be built at Yangjiang as soon as possible. See Taishan below.

Yangjiang will be the second nuclear power base of the Guangdong Nuclear Power Group, which has long preferred French technology. Development of the plant was approved in 2004, and site works are well under way. Now that the CPR-1000 has been confirmed as technology for it, construction of the first two or four units is expected to start in mid 2008, for commercial operation in 2013. Yangjiang and a further 14 units, along with six units at Lingao and Daya Bay, will be operated under regional DNMC management.

Choice of turbine generators for the four AP1000 units will be by CNNC and CPI, not SNPTC. In September CNNC selected Mitsubishi Heavy Industries as supplier for Sanmen, and this will reportedly boost the capacity of the plant from its designed 1175 MWe to 1250 MWe gross. Siemens, Alstom and Mitsubishi were bidding as subcontractors to Chinese firms. The Eleventh 5-year plan 2006-10 has firmer environmental goals than previously, including reduction of 20% in the amount of energy required per unit of GDP, ie 4% reduction per year.

Nuclear power developments originally proposed in the 11th 5-year plan included:
four CPR-1000 units at Hongyanhe, Liaoning province (NE),
two 1000 MWe units at Haiyang, Shandong province (now 1100 MWe AP1000),
two 1000 MWe units at Hui'an/Fuqing, Fujian province,
two units at Hongshiding, Rushan city, Shandong province,
two units at Tianwei, Lufeng in Guangdong province,
two units at Taishan in Guangdong.

In 2007 it was announced that three state-owned corporations have been approved to own and operate nuclear power plants: CNNC, CGNPC and CPI. Any other public or private companies are to have minority shares in new projects. CPI is also expected to determine where the next Generation 3 reactor is built.

Construction of the first unit of the Hongyanhe nuclear power plant in Donggang town at Wafangdian, 100 km north of Dalian, Liaoning started in August 2007, though site works had been under way since July 2006. The cost of all four 1080 MWe CPR-1000 units in phase 1 is put at RMB 50 billion (US$ 6.6 billion). China Nuclear Power Engineering Corporation (CNPEC), part of CGNPC, is managing the project - the first nuclear plant in the northeast of China. Shanghai Electric won a US$ 260 million contract for equipment and Alstom is to provide the four turbine-generator sets for US$ 184 million. Commercial operation is planned for 2012-14.

Haiyang in Shandong province, controlled by CPI, had been mentioned as the likely site of further Generation 3 reactors in China, if an early decision was made to buy two EPR units. However, this became the second site for a pair of Westinghouse AP1000 reactors. The Shandong Nuclear Power Company Ltd was set up in 2004 as a subsidiary of CPI to build and operate the $3.25 billion Haiyang nuclear power project. Work on the site has started and first concrete is expected about September 2009.

Construction of the 6-unit Ningde nuclear power plant apparently commenced in November 2007. This is at Qinyu, Ningde city in northeast of Fujian province and phase 1 comprises four CPR-1000 units costing $7.145 billion. Construction was approved by the National Development & Reform Commission in September 2006, and local content will be over 70%. CGNPC expects commercial operation of the first unit in 2012, with the others following to 2015.

The Taishan nuclear plant in Guangdong province was planned by CGNPC to have six 1000 MWe class units but will now host Areva's 1600 MWe EPR units, starting with two of them. In November 2007 Areva finalised a contract with CGNPC for the first two nuclear units plus supply of fuel to 2026 and other materials and services for them. Steam turbines and generators will be purchased separately. CGNPC and Areva are also setting up a 50-50 engineering joint venture as a technology transfer vehicle for development of this and future EPR plants in China and perhaps abroad, building on Areva's European experience.

EdF will take a 30% share in the Taishan project as joint venture partner with CGNPC in the Taishan Nuclear Power Company which will oversee the building, then own and operate the plant. The whole project, including fuel supply, totals EUR 8 billion, of which the nuclear reactors themselves are reported to be about EUR 3.5 billion. (EdF is project manager and architect for the Flamanville-3 EPR project in France, and this initiative consolidates its change in corporate strategy outside France as expressed already in the UniStar JV set up in mid 2007 with Constellation in USA to build, own and operate a fleet of US-EPRs in North America.)n February 2006 an agreement was signed between CNNC and China Huadian Corp for the first two units of Hui'an plant at Fuqing in Fujian, costing US$ 2.8 billion and the Fujian Fuqing Nuclear Co Ltd was set up in May 2006. CNNC is responsible for the project.

In July 2006 a US$ 3.1 billion agreement was signed for construction of the first two units (of 6) of the Bailong nuclear plant in Fangchenggang city of Guangxi autonomous region of south China, with CGNPC expecting construction to start by end of 2010.

In October 2006 a preliminary agreement for two further 1060 MWe AES-91 (VVER-1000) reactors at Tianwan (Lianyungang) in Jiangsu province was signed with Russia's Atomstroyexport. Construction was to start when both the first two units were commissioned, and hence in November 2007 a further agreement for their actual construction was signed.

In November 2006 an agreement was signed by CNNC to proceed with the first two units of Rushan nuclear plant at Hongshiding near Weihai in Shandong province, costing US$ 3.2 billion, with construction to begin in 2009 and first power in 2015. Six units totaling 6000-8000 MWe are envisaged at the site.

The Wuhu nuclear plant at Wuhu in Anhui province is planned to have six 1000 MWe units to be constructed in phases. CGNPC's proposal for two units of phase 1 has been submitted and some preparatory work is under way. It is not clear whether this is the same project as Bamaoshan.

CGNPC says that the 2nd Lianyungang nuclear power project is planned by it with four units of 1000 MWe class to be constructed in phases. This is in Lianyungang City of Jiangsu province apparently alongside CNNC's Tianwan plant and involving the Jiangsu Nuclear Power Company. A project proposal has been submitted to the National Development and Reform Commission. Preparations for the project are undergoing as planned, according to CGNPC.

CGNPC expects to spend US$ 9.5 billion on its Lingao-2, Yangjiang and Taishan nuclear power plants by 2010 and to have 6000 MWe on line by then. Work is under way at all these sites and also at Ningde. It is also accelerating efforts to start on the Lufeng plant in Shanwei and Wuhu in Anhui province. It is expecting to have 34,000 MWe nuclear capacity on line by 2020, providing 20% of the province's power, and 16,000 MWe under construction then.

A demonstration high-temperature gas-cooled reactor, the HTR-PM of 200 MWe was approved in November 2005, to be built at Shidaowan, near Rongcheng in Shandong province by a consortium led by the China Huaneng Group Co. - the country's largest generating utility but hitherto without nuclear capacity It is now being licensed and key components will be ordered in 2007 for construction start in 2009 and commissioning by 2013. This will be the demonstration plant for 18 further modules at the site, total 3800 MWe. (see also R&D section below)

In November 2007 China Huaneng Group or the Huaneng Nuclear Power Development Company signed an agreement with CGNPC to build four large reactors, probably CPR-1000, at Shidaowan in Shandong province in an $8 billion deal. Further partners may become involved as National Development and Reform Commission approval is sought. Construction is expected to start in 2012-13.

CNNC said in December 2006 that it planned to build four 100 MWe units at Heyuan, inland in NE Guangdong, at a cost of US$ 6.4 billion, but no timing was mentioned.More than 16 provinces, regions and municipalities have announced intentions to build nuclear power plants in the twelfth 5-year plan 2011-15. These include Henan and Sichuan, as well as those tabulated above - most of which have preliminary project approval by the central government but are not necessarily scheduled for construction. Provinces will put together firm proposals with reactor vendors by 2008 and submit them to the central government's National Development and Reform Commission (NRDC) for approval before 2010.

In 2006 CNNC signed agreements in Liaoning, Hebei, Shandong and Hunan provinces and six cities in Hunan, Anhui and Guangdong provinces to develop nuclear projects. CNNC has pointed out that there is room for 30 GWe of further capacity by 2020 in coastal areas and maybe more inland such as Hunan "where conditions permit". In October 2007 CNNC's list of projects included Chuanshan (Jiangsu province), Jiyang (Anhui), Hebao Island (Guangdong), Shizu (Chongqing), Xudabao (Liaoning) and Qiaofushan (Hebei) as well as others tabulated above.
The complex ownership structure of Chinese nuclear plants is described in the Organisation section below.

Reactor technology

China has set the following points as key elements of its nuclear energy policy:

* PWRs will be the mainstream but not sole reactor type.
* nuclear fuel assemblies are fabricated and supplied indigenously.
* domestic manufacturing of plant and equipment will be maximised, with self-reliance in design and project management.
* international cooperation is nevertheless encouraged.

The technology base for further reactors remains officially undefined, though according to Nucleonics Week the two year struggle between the established CNNC pushing for indigenous technology and the small but well-connected State Nuclear Power Technology Corp (SNPTC) favouring imported technology was won by SNPTC. In particular SNPTC proposes use of indigenized 1000+ MWe plants with advanced third-generation technology, arising from Westinghouse AP1000 designs built at Sanmen and Haiyang.

In September 2006 the head of the China Atomic Energy Authority said that he expected large numbers of third-generation PWR reactors derived from foreign technology to be built from about 2016, after experience is gained with the initial Sanmen and Haiyang AP1000 plants. A report suggests that the Westinghouse AP1000 will be boosted, perhaps to 1400 MWe, under the Shanghai Nuclear Engineering Research & Design Institute (SNERDI) for large-scale deployment and possibly export (with Westinghouse agreement). The agreement with Westinghouse is for the company to transfer technology over the first four units so that SNPTC can build the following ones on its own. However, it would not be able to export the units unless the design was substantially modified by SNERDI.

CNNC had been working with Westinghouse and Framatome ANP (Areva NP) at the Shanghai Nuclear Energy Research & Design Institute (SNERDI) since the early 1990s to develop a Chinese standard 3-loop PWR design, the CNP-1000 based on Qinshan units, with high (60 GWd/t) burn-up and 18 month refueling cycle. CNNC has been keen to create its own brand of advanced second-generation reactor such as this with intellectual property rights, and wanted to build two initial CNP-1000 plants at Fangjiashan near Shanghai in the 11th Economic Plan, though the design probably would not have been ready. In early 2007 the CNP-1000 development was stalled indefinitely, and SNERDI resources transferred to the AP1000 program, though this will create a problem in relation to export plans for two CNP-1000 units to Pakistan.

Guangdong Nuclear Power's indigenous focus has been on the French-derived 3-loop units such as at Lingao, without major modification, and now called CPR-1000 or "improved Chinese PWR". However, Areva retains intellectual property rights for this. It seems that the CPR-1000 will be widely and relatively quickly deployed for domestic use under CGNPC leadership.

In September 2005 Atomic Energy of Canada Ltd (AECL) signed a technology development agreement with CNNC which opened the possibility of it supplying further Candu-6 reactors. The agreement introduced a new element into the discussion on 2005 plans outlined above. AECL built the Qinshan phase III 2-unit plant on schedule and under budget and estimates that it could be replicated for 25% less cost. Any replication would be on the basis of involving local engineering teams, not on a turnkey basis, but the technology is now well understood and the decades-old Candu-6 design would likely pose less problems for technology transfer than state of the art 3rd-generation designs from Westinghouse and Areva NP. The later Korean Candu-6 plants at Wolsong had 75% local content. However, the agreement with CNNC - more specifically with its SNERDI - did look further forward to collaboration on AECL's new ACR design later on. However, SNERDI is now focused on AP-1000 engineering and reassigned to SNPTC, so early in 2008 work on Candu fuel technologies passed to another CNNC entity: the Nuclear Power Institute of China (NPIC).

Having so far left the Chinese reactor market to others, GE has been commending its new reactor designs for the next tranche of orders there. China has expressed interest in the ABWR, though it has had a de facto policy of favouring pressurised water designs, but GE will offer its two boiling water types - the ABWR which is operating in Japan and under construction there and elswhere, and the newer ESBWR which features strongly in US plans for new capacity. GE Nuclear and its Japanese partners have been in discussion with CNNC and provincial governments.

In February 2006 the State Council announced that the large advanced PWR and the small high temperature gas-cooled reactor (HTR) are two high priority projects for the next 15 years. The former will depend on "Sino-foreign cooperation, in order to master international advanced technology on nuclear power and develop a Chinese third-generation large PWR". CNNC has confirmed this, while pointing longer-term to fast neutron reactors (see R&D section below).

The small HTR units will be 200 MWe reactors with pebble bed fuel, similar to that being marketed by South Africa. See R&D section below.

The China Zhongyuan Engineering Corporation is involved with preparations to construct a 300 MWe nuclear power plant at Chasma in Pakistan - a twin to that already commissioned in 2000.

A 200 MWt NHR-200 integral PWR reactor for heat and desalination has been designed and engineering studies concluded in mid 2006.

Longer-term, fast breeder reactors are seen as the main technology. A 65 MWt fast neutron reactor is under construction near Beijing and due to achieve criticality in 2008. CNNC expects the technology to become predominant by mid century.

Uranium resources and mining

China's known uranium resources of 70,000 tU are theoretically sufficient to fill the requirements for the mainland nuclear program for the short-term. Production of some 840 t/yr - including that from heap leach operations at several mines in Xinjiang region - supplies about half of current needs. The balance is imported (reportedly from Kazakhstan, Russia, and Namibia). The Fuzhou mine in the southeastern Giangxi province is in a volcanic deposit. Xinjiang's Yili basin in which the Yining (or Kujiltai) ISL mine sits is contiguous with the Ili uranium province in Kazakhstan, though the geology is apparently different. The other three mines are in granitic deposits.

China Nuclear Uranium Corporation plans to bring into production a new 200 tU/yr mine at Fuzhou, and expand the Yining ISL mine to 300 tU/yr. Pilot ISL tests have been under way on the Shihongtan deposit in the Turpan-Hami basin of Xinjiang. In addition, the Hengyang underground uranium mine is on stand-by. The mine, which started up in 1963, has a nominal production capacity of 500-1000 tU/yr.

CNNC's Bureau of Geology and the Beijing Research Institute of Uranium Geology are the key organisations involved with a massive increase in exploration effort since 2000, focused on sandstone deposits amenable to ISL in the Xinjiang and Inner Mongolia regions.

With the prospective need to import much more uranium, China Nuclear International Uranium Corporation (SinoU) was set up by CNNC to acquire uranium resources internationally. It is setting up a mine in Niger and is investigating prospects in Kazakhstan, Mongolia and Algeria. Sinosteel Corporation holds minor equity in explorer PepinNini Minerals Ltd in Australia and has 60% of a joint venture with PepinNini to develop a uranium deposit in South Australia. A bilateral safeguards agreement will allow import from Australia. Canada and South Africa are also seen as potential suppliers.

In September 2007 two agreements were signed in Beijing between Kazatomprom and CGNPC on Chinese participation in Kazakh uranium mining joint ventures and on reciprocal Kazatomprom investment in China's nuclear power industry. These came in the context of an earlier strategic cooperation agreement and one on uranium supply and fuel fabrication. This is a major strategic arrangement for both companies, with Kazatomprom to become the main uranium and nuclear fuel supplier to CGNPC. A framework strategic cooperation agreement was then signed with CNNC.

In November 2007 CGNPC signed an agreement with Areva to take a 24.5% equity stake in its UraMin subsidiary which is proposing mines in Namibia, South Africa and Central African Republic. (This appears to be part of the EUR 8 billion Taishan deal - see above.) Areva also agreed to buy 35% of the uranium from UraMin over the lifetime of the three deposits - the total quantity involved is 20,000 tU.

In 2007 CNNC commissioned Sparton Resources of Canada with the Beijing No.5 Testing Institute to undertake advanced trials on leaching uranium from coal ash out of the Xiaolongtang power station in Yunnan. The ash contains 160-180 ppm U - above the cut-off level for some uranium mines. The power station ash heap contains over 1700 tU, with annual arisings of 106 tU. Two other nearby power stations burn lignite from the same mine.

Fuel cycle - front end

A conversion plant is operating at Lanzhou, of about 1500 tU/yr, and another at Diwopu, also in Gansu province, of about 500 tU/yr.

In 2010 China will need 3600 tU and 2.5 million SWU of enrichment. In 2020 it expects to need 10,000 tU and 7 million SWU.

A Russian centrifuge enrichment plant at Hanzhun, SE Shaanxi province, was set up under 1992, 1993 and 1996 agreements between Minatom/ Tenex and China Nuclear Energy Industry Corporation (CNEIC) covering a total 1.5 million SWU/yr capacity in China. The first modules at Hanzhun came into operation in 1997-2000, giving 0.5 million SWU/yr. In November 2007 Tenex undertook to build a further 0.5 million SWU of capacity at Hanzhun, completing the 1990s agreements. The site is under IAEA safeguards. Up to 2001 China was a major customer for Russian 6th generation centrifuges, and further supplies of these are scheduled from 2008.

The Lanzhou enrichment plant in Gansu province to the west started in 1964 for military use and operated commercially 1980 to 1997 using Soviet-era diffusion technology. A Russian centrifuge plant of 500,000 SWU/yr started operation there in 2001 and it is designed to replace the diffusion capacity.

A contract with Urenco supplies 30% of the enrichment for Daya Bay from Europe, and Tenex has agreed to supply SWU as low-enriched uranium to China from 2010 to 2021.

CNNC's PWR fuel fabrication plant at Yibin, Sichuan province, supplies Qinshan-1 with 11 tonnes a year of fuel assemblies. A second production line was established in the same factory to supply 26 tonnes per year of fuel assemblies to the Daya Bay units. Over 2003-06 enrichment for Lingao is being increased from 3.2% to 4.45%. The Yibin plant is expected to expand.

For CANDU: after the initial core loading of Canadian fuel at the PHWRs, subsequent fuel assemblies will be supplied by Baotou fuel factory. The CANDU fuel production line project was launched in April 1999.

In order meet its goal of being self-sufficient in nuclear fuel supply, additional fuel production capacity will be required. However, the fuel for Taishan being supplied to CGNPC by Areva, comprising the two first cores and 17 reloads, will be fabricated in France.

Used fuel and reprocessing

When China started to develop nuclear power, a closed fuel cycle strategy was also formulated and declared at an IAEA conference in 1987. The spent fuel activities involve: at-reactor storage; away-from-reactor storage; and reprocessing. CNNC has drafted a state regulation on civil spent fuel treatment as the basis for a long-term government program.

Based on expected installed capacity of 20 GWe by 2010 and 40 GWe by 2020, the annual spent fuel arisings will amount to about 600 tonnes in 2010 and 1000 tonnes in 2020, the cumulative arisings increasing to about 3800 tonnes and 12 300 tonnes, respectively. The two CANDU units, with lower burn-up, will discharge 176 tonnes of spent fuel annually.

Construction of a centralised spent fuel storage facility at Lanzhou Nuclear Fuel Complex in Gansu province began in 1994. The initial stage of that project has a storage capacity of 550 tonnes and could be doubled.

A pilot (50 t/yr) reprocessing plant using the Purex process was opened in 2006 at Diwopu in Gansu province. This is capable of expansion to 100 t/yr and will be fully operational in 2008. A large commercial reprocessing plant based on indigenous advanced technology is planned to follow and begin operation about 2020. This is likely to be under international safeguards.

In November 2007 Areva and CNNC signed an agreement to assess the feasibility of setting up a reprocessing plant for used fuel and a mixed-oxide (MOX) fuel fabrication plant in China, representing an investment of EUR 15 billion. Some further decision on this is expected in mid 2008.

High-level wastes will be vitrified, encapsulated and put into a geological repository some 500 metres deep. Site selection is focused on six candidate locations and will be completed by 2020. An underground research laboratory will then operate for 20 years and actual disposal is anticipated from 2050.

Early in 2008 CCNC subsidiary the Nuclear Power Institute of China (NPIC) signed an agreement with Atomic Energy of Canada Ltd (AECL) to undertake research on advanced fuel cycle technologies such as recycling recovered uranium from spent PWR fuel and Generation IV nuclear energy systems. Initially this seems to mean DUPIC, the Direct Use of spent PWR fuel In Candu reactors, the main work on which so far has been in South Korea. Reconstituted PWR spent fuel with up to 1.6% fissile content is used directly as Candu fuel.

There is already industrial-scale disposal of low and intermediate-level wastes at two sites, in the northwest and at Bailong in Guangxi autonomous region of south China.

Research & Development

A 10 MWt high-temperature gas-cooled demonstration reactor (HTR-10), having fuel particles compacted with graphite moderator into 60mm diameter spherical balls (pebble bed) was commissioned in 2000 by the Institute of Nuclear Energy Technology (INET) at Tsinghua University near Beijing. It reached full power in 2003 and has an outlet temperature of 700-950°C and may be used as a source of process heat for heavy oil recovery or coal gasification. It is similar to the South African PBMR intended for electricity generation. It was subject to a test of its intrinsic safety in September 2004 when as an experiment it was shut down with no cooling. Fuel temperature reached less than 1600°C and there was no failure.

Initially the HTR-10 has been coupled to a steam turbine power generation unit, but second phase plans are for it to operate at 950°C and drive a gas turbine, as well as enabling R&D in heat application technologies. This phase will involve an international partnership with Korea Atomic Energy Research Institute (KAERI), focused particularly on hydrogen production.

A key R&D project is the demonstration Shidaowan HTR-PM of 200 MWe (two reactor modules, each of 250 MWt) which is being built at Shidaowan in Shandong province, driving a steam turbine at about 40% thermal efficiency. China Huaneng Group, one of China's major generators, is the lead organization in the consortium with China Nuclear Engineering & Construction Group and Tsinghua University's INET, which is the R&D leader. Chinergy is the main contractor for the nuclear island. Projected cost is US$ 385 million, with the aim for later units being US$ 1500/kWe. The licensing process is under way with NNSA and completion is expected in 2013.

The HTR-PM will pave the way for 18 (3x6) further units at the same site or Weihai - total 3800 MWe - also with steam cycle. Then a series of HTRs, possibly with Brayton cycle directly driving the turbines, will be factory-built and widely installed throughout China.

In March 2005 an agreement between PBMR of South Africa and Chinergy of Beijing was announced. PBMR Pty Ltd is has been taking forward the HTR concept (based on earlier German work) since 1993 and is ready to build a 125 MWe demonstration plant. Chinergy Co. is drawing on the small operating HTR-10 research reactor at Tsinghua University which is the basis of the 195 MWe HTR-PM demonstration unit which also derives from the earlier German development.

Both PBMR and HTR-PM are planned for operation about 2010. The new agreement is for cooperation on the demonstration projects and subsequent commercialisation, since both parties believe that the inherently safe pebble bed technology built in relatively small units will eventually displace the more complex light water reactors. Chinergy is a 50-50 joint venture of Tsinghua University's INET and CNEC.

A 65 MWt fast neutron reactor - the Chinese Experimental Fast Reactor (CEFR) - is under construction at China Institute of Atomic Energy (CIAE) near Beijing and due to achieve criticality in 2009. There has been some Russian assistance in its development. R&D on fast neutron reactors started in 1964. A 600 MWe prototype fast reactor is envisaged by 2020 and there is talk of a 1500 MWe one by 2030.

A 200 MWt NHR-200 integral PWR has been developed by INET near Beijing for desalination and district heat. It is developed from the NHR-5 prototype which started up in 1989.

About ten other research reactors ranging up to 15 MW, and one 125 MW test reactor (HFETR), are operational.

The NDRC is strongly supporting R&D on advanced fuel cycles which will more effectively utilise uranium, and possible also use thorium. The main research organisations are INET at Tsinghua University, CIAE and the Nuclear Power Institute of China (NPIC) at Chengdu. INET is looking at a wide range of fuel cycle options including thorium, especially for the Qinshan 3 PHWR units. However, NPIC is the main body focused on the PHWR technology and fuel cycles, supported by Atomic Energy of Canada Ltd. It is looking at use of reprocessed uranium in Qinshan's PHWR reactors. CIAE is mainly involved with fast reactor R&D.

Organisation - national

Under the State Council of Ministers, the China Atomic Energy Agency (CAEA) is responsible for planning and managing the peaceful use of nuclear energy and promoting international cooperation. . Since being split from the old CNNC in 1998, the CAEA has been the key body planning and managing civil nuclear energy and reviewing and approving feasibility studies for new plants. It is under the control of the Commission for Science, Technology & Industry for National Defence under the State Council.

The National Development and Reform Commission (NDRC) as the economic planning agency is finally responsible for project approval, and since it was split off from CNNC in 1998 it also has reported to the Commission for Science, Technology & Industry for National Defence under the State Council.

In March 2008 the formation of a new State Energy Bureau (SEB) was announced. It is to draft an integrated energy development strategy complete with various programs and then monitor and implement its execution. It will act under the NRDC and promote favoured forms of energy and encourage conservation. It is not yet clear how it will relate to other national energy entities, but its first announcement was that nuclear energy should provide significantly more power by 2020 than previously planned.

The State Nuclear Power Technology Corporation (SNPTC) ) was set up in 2004 to take charge of technology selection for new plants being bid from overseas. This is through its Preparatory Office which draws expertise from other organizations such as CGNPC. SNPTC is directly under China's State Council and closely connected with it.

The National Nuclear Safety Administration (NNSA) under CAEA was set up in 1984 and is the licensing and regulatory body which also maintains international agreements regarding safety. It now reports to the State Council directly.

In May 2007 a memorandum of understanding between the NNSA and the US Nuclear Regulatory Commission was signed regarding Westinghouse's AP1000 reactor design. The AP1000 gained US design certification in 2005 and Westinghouse has applied for pre-licensing design approval for it in UK, expressing its policy of global standardisation.

The State Environment Protection Administration (SEPA) is responsible for radiological monitoring and radioactive waste management. A utility proposing a new plant submits feasibility studies to the CAEA, siting proposals to the NNSA and environmental studies to SEPA.

The China National Nuclear Corporation (CNNC) controls most nuclear sector business including R&D, engineering design, uranium exploration and mining, enrichment, fuel fabrication, reprocessing and waste disposal. It also claims to be the major investor in all nuclear plants in China. Established by the State Council in 1988 as a self-supporting economic entity, it "combines military production with civilian production, taking nuclear industry as the basis while developing nuclear power and promoting a diversified economy." It has numerous subsidiaries. CNNC designed and built Qinshan 1-3 and controls the full Qinshan power plant. It has a payroll of about 1000,000 and owns shares in most of the nuclear power generation projects (see below). In particular it is a champion of local designs.

China Power Investment Corporation (CPI, formed from the State Power Corporation and inheriting all its nuclear capacity) is a major power generator and is the largest state-owned nuclear power investment and operating organisation. At the end of 2004 it was reported to have assets of US$ 12.8 billion. It was at the forefront of discussions on plants for the 11th five-year plan, and by mid 2005 had submitted power projects with the total capacity of 31,460 MW to the State Development and Planning Commission for approval.

In Guangdong province and now more widely the China Guangdong Nuclear Power Group , comprising some 20 companies and with assets of RMB 60 billion, plays the leading role. China Guangdong Nuclear Power Holding Company (CGNPC) leads this Group which is responsible for Daya Bay, Ling Ao, Yangjiang, Hongyanhe and Ningde power stations as well as further projects in the province and outside it. CGNPC was esteblished in 1994 and is 45% owned by the provincial government (via Guangdong Nuclear Power Co), 45% by CNNC and 10% by CPI. There is 25% Hong Kong equity in the Daya Bay plant.

China HuaNeng Group (CHNG), is one of China's major generators, with about 50 GWe in operation. It is becoming involved with nuclear power, with two projects in Shandong province (see below). It is an independent state-owned but incorporated business entity focused on power generation. It aims to have 80 GWe installed by 2010 and 120 GWe by 2020.

China National Uranium Corporation is responsible for CNNC's uranium exploration domestically. In December 2006 China Nuclear International Uranium Corporation (SinoUranium) was set up by CNNC to acquire uranium resources internationally. It is active in Niger, is setting up a mine in Niger and is investigating prospects elsewhere. Sinosteel is another state-owned entity with equity in an Australian uranium explorer and 60% joint venturer with it in developing a mine, hoping to sell product to the Chinese nuclear industry.

The China Nuclear Engineering and Construction group (CNEC or CNECC) is a major state entity split off from the rest of CNNC in 1998 and responsible for nuclear plant construction (including that in Pakistan).

CNEC is closely linked with the Beijing Institute of Nuclear Engineering (BINE), a CNNC subsidiary responsible for basic design of reactors. It is based in the Haidian university precinct north of Beijing and has 1800 staff.

China Nuclear Engineering Co was set up by CNNC in 2006 to rationalise design work for new nuclear plants as well as to help win overseas orders for nuclear plants. It is built on the technology basis of BINE and is also responsible for the construction, equipment procurement, trial testing and operational maintenance of nuclear power plants. Future project design will move from BINE to China Nuclear Engineering, allowing BINE to concentrate on technology planning.

The Nuclear Power Institute of China (NPIC) is based in Chengdu, Sichuan Province, and is part of CNNC. It was set up in 1958 for nuclear reactor engineering research, design, testing and operation and has 3700 staff. Its R&D now takes in the Candu design used at Qinshan, and in particular, aspects of its fuel cycle.

The Shanghai Nuclear Energy Research & Design Institute (SNERDI) was part of CNNC and worked with BINE and NPIC in detailed design work for the AP1000 projects. However, SNERDI has been reassigned to SNPTC and is remains dedicated to AP1000 design work. (It also worked closely with AECL on reactor engineering for the Qinshan Candu reactors.)

The China Nuclear Energy Industry Corporation (CNEIC) is a CNNC subsidiary established in 1980 as a trading company authorized to carry out import and export trade of uranium products, nuclear fuel cycle and nuclear power and technology equipment. It acted as agent in establishing Qinshan and Tianwan power plants. In Guangdong the China Nuclear Power Engineering Corporation (CNPEC), part of CGNPC and set up in 2004, plays the leading reactor engineering role. China Nuclear Power Design Co is another CGNPC subsidiary, responsible for feasibility studies and designs.

Areva Dongfang is a joint venture of Areva with DongFang Electric Corporation (DEC), part of CGNPC, is a high--profile state-owned company specialising in power equipment manufacturing. It had supplied 110 GW of generating equipment over 20 years to the end of 2005. Areva also has a 2005 joint venture with Dongfang Electrical Machinery Company Ltd (DFEM) - Areva Dongfang Reactor Coolant Pumps, localising the manufacture of pumps.

The China Institute of Atomic Energy is responsible for R&D on vitrification of high-level wastes. The China Institute for Radiation Protection is responsible for R&D on decommissioning.

Planning for major nuclear energy research projects is the responsibility of the Ministry of Science & Technology (MOST).

The Chinese Nuclear Society is to focus on nuclear science popularization and education in 2006.

Organisation - power plants

Daya Bay is owned by Guangdong Nuclear Power Joint Venture Co Ltd, and Lingao by the Ling Ao Nuclear Power Co Ltd. Both sites are run by Daya Bay Nuclear Power Operations & Management Co Ltd (DNMC) which was formed in 2003 and is 50% owned by each company.

Qinshan is a CNNC enterprise. Phase 1 is owned by Qinshan Nuclear Power Co, phase 2 (including units 6 & 7) is owned by Qinshan Nuclear Power JV Co Ltd, with a minority stake in being held by CPI. Qinshan phase 3 is owned by Third Qinshan Nuclear Power Co Ltd - also part of CNNC but with China Electric Power Group Corporation, Zhejiang Provincial Electric Power Corporation, Zhejiang Provincial Electric Power Development Corporation, Shenergy (Group) Co Ltd and Jiangsu International Trust & Investment Corporation as other shareholders.

Jiangsu Nuclear Power Corporation was established in 1997 to construct and operate Tianwan NPP, with four units planned (phases 1 & 2) and space for four more. CNNC owns 50% share, CPI 30% and Jiangsu Guoxin Group 20%.

Early in 2005, Liaoning Hongyanhe Nuclear Power Company Ltd. was established in Liaoning Province by CPI, and will be responsible for the Hongyanhe nuclear power project 100 km north of Dalian City. As of early 2007, 45% was held by CPI, 45% by CGNPC and 10% by Dalian Municipal Construction Investment Corp. CGNPC will be responsible for construction and the first five years operation of the plant.

The Shandong Hongshiding Nuclear Power Company Ltd is developer of a new plant at Hongshiding, in Rushan city and has 51% holding by CNEC/CNNC, with Huadian Power International Co and two investment companies.

The Shandong Nuclear Power Company Ltd is a subsidiary of CPI and was established at Yantai in July 2004 to undertake the development, construction, operation and management of the Haiyang nuclear power project. CPI owns 61 or 65%, CNNC 5%, and four local entities the balance.

Ningde Nuclear Power Co Ltd was set up in 2006 by CGNPC (51%), Datang International Power Generation Co and Fujian Coal Group as a joint venture to build the first phase of the 6-unit Ningde nuclear plant at Qinyu, Ningde city in Fujian province.

The Fujian Fuqing Nuclear Co Ltd was set up in May 2006 by CNNC (51%) as a joint venture company with China Huadian Corp (49%) to build the Hui'an/ Fuqing plant at Hui'an or Fuqing in Fujian province. The first two units of six 1000 MWe reactors are estimated to cost US$ 2.8 billion.

Bailong: China Guangdong Nuclear Power Holding Company (CGNPC, 40%), CPI (40%) and Guangxi Investment Group Co Ltd (20%) signed a framework agreement in July 2006 to invest US$ 3.1 billion in the first two units of the 6000 MWe Bailong plant in Guangxi autonomous region of southern China. CGNPC is in charge.

CNNC owns 51% of the Sanmen Nuclear Power Company, which was set up in April 2005 to build and own the Sanmen project. Other shareholders are the provincial government's Zhejiang Energy Company (Group) Ltd., China Electricity Investment Nuclear Power Company, China Huadian Company Ltd. and CNEC.

Yangjiang Nuclear Power Co Ltd was set up in 2005 under CGNPC and is in charge of construction and operation of Yangjiang nuclear power station.

Taishan Nuclear Power Company is being set up in 2007 as a CGNPC subsidiary with 30% held by Electricite de France (EdF) to build, own and operate the Taishan nuclear plant.

Bamaoshan, on the Yangtze River near Wuhu, Anhui province: In May 2007 CGNPC signed a joint venture agreement with partners Shenergy Co. of Shanghai (20%), Shanghai Electric Power Co (14%) and Anhui Province Energy Group Co (15%) to build the $2.9 billion first phase (2 x 1000 MWe) of the Wuhu plant, to comence operation in 2015. All four CPR-1000 units are expected to cost $5.84 billion.

Taohuajiang Nuclear Power Company Ltd was set up by CNNC in June 2006 to build the Taohuajiang nuclear power plant near Yueyang in inland Hunan province. This is understood to be a CPI project however.

The Shidaowan prototype reactor is being built by Huaneng Shidaowan Nuclear Power Company. China Huaneng Group is the lead organization in the consortium with 47.5% share. China Nuclear Engineering & Construction Group will have a 32.5% stake and Tsinghua University INET 20%.

The 4000 MWe Shidaowan / Rongcheng plant is apparently a joint venture of the Huaneng Nuclear Power Development Company and CGNPC but further partners may become involved as State Council approval is sought.

In February 2007 CNNC together with China Three Gorges Project Corporation, China Resources Co Ltd and Hunan Xiangtou Holdings Group Co Ltd set up the joint venture Hunan Taohua River Nuclear Power Co Ltd to build and operate a 4 x 1000 MWe nuclear power plant at Lishanhe in Yiyang City in Hunan province in two stages at a total cost of $5 billion. This is about 100 km SW of Yueyang. The project was approved by the State Development & Reform Commission in November 2005.

Non-proliferation

China is a nuclear weapons state, party to the Nuclear Non-Proliferation Treaty (NPT) under which a safeguards agreement has been in force since 1989, with the Additional Protocol in force since 2002. China undertook nuclear weapons tests 1964-96. Since then it has signed the Comprehensive Test Ban Treaty. In May 2004 it joined the Nuclear Suppliers' Group.

China has Peaceful Use agreements for nuclear materials with Canada, USA, Germany and France. The Canadian one is very similar to Australian bilateral safeguards agreements.

All imported nuclear power plants - from France, Canada and Russia- are under IAEA safeguards*, as is the Russian Hanzhun centrifuge enrichment plant in Shaanxi.