November 26, 2010
China and Russia are breaking out of the shadow of the U.S. economy so rapidly that the press can hardly keep pace. In the last two days, a) China and Russia have agreed to drop the U.S. dollar in their bi-lateral trade, and b) China has revealed ambitious plans to start exporting reactors by 2013 and develop an integral fast breeder program that will complete its nuclear fuel cycle.
All this has extraordinarily implications for America’s economic future. Approximately 40 percent of the dollar’s value comes from its use as the world’s international currency. Yet inflation and U.S. debt have eroded that value and China and Russia are catching on. If the world follows their lead in dropping the dollar, every American will lose 40 percent of his or her net worth overnight.
At the same time, both Russia and China are solidifying their economies by charging ahead with nuclear energy, while U.S. concerns remain fixated on tritium leaks and Yucca Mountain. At the China International Nuclear Symposium this week, Zhang Shanjing, president of China’s Guangdong Nuclear Power Corporation revealed that the company will probably start selling reactors for export within three years.
Chinese technicians have already reversed-engineered Areva 900-MW reactors built at Daya Bay into the CPR-1000 and have 16 under construction, the first scheduled to open next September. Zhang said that once certain intellectual property issues are cleared up with Areva, Guangdong would begin exporting, probably by 2013.
Chinese engineers are already doing the same thing with the Westinghouse AP1000 as well. Testifying before the French Senate this week, Areva CEO Anne Lauvergeon said is it “very worrying” to her company how quickly and efficiently the Chinese are building Areva reactors. Construction of two EPR-1700s at Taishan is ahead of schedule and on budget, while construction of the same reactors in Finland and France are years behind and far over budget.
Lauvergeon said the Chinese versions would come in costing 40 percent less than European efforts. Completion of the reactor at Olkiluoto is now expected to take 86 months and Flamanville 71 months, while the Taishan 1and 2 reactors are being completed in 46 months. Construction at Taishan 1, begun in 2009, is actually being slowed down so it does not overtake construction at Flamanville, which began in 2007, so that lessons learned in France can be applied in China. The implication is, of course, that once the Chinese enter the international market with similar reactors, they will be able to outbid Areva on any project.
Russia is making rapid headway on nuclear as well. Just this week, Rosatom signed an agreement with Fortum, the Finnish nuclear corporation, to apply Russia’s “nuclear competencies in future nuclear power projects." Even France’s foothold in Finland may be challenged by the Russian effort.
All this is incredibly important to the future of the U.S. economy, yet it is making almost no news. The Russia-China deal on dropping the dollar has appeared only on Drudge Report. The only U.S. response to China’s export announcement has been a warning from the ever-vigilant Carnegie Endowment for International Peace saying that China’s development of a fast breeder may lead to “nuclear proliferation.”
Read more about it at World Nuclear News