Moscow Beats Out West in Chinese Nuclear Deal

MOSCOW plans to build a nuclear power plant in China and bag the sort of lucrative deal that has eluded American firms during the decade of normalized Sino-US relations. The Soviet Union will help China construct a Soviet-designed 2,000-megawatt pressurized water reactor at Jinzhou in the northwestern province of Liaoning in the early 1990s, says Fang Yushu, vice-director of the province's office of administration. Other provinces are considering similar joint ventures with the Soviets, he says.

The plan illustrates how the economic compatibility of the two Asian neighbors could spur a jump in trade and cooperation after they normalize ties in Beijing this week, says Mr. Fang and Beijing-based diplomats. China is able to provide labor and light-industrial goods, while the Soviets are rich in raw materials.

The output of China's power plants this decade has failed to keep pace with industrial growth.

Foreign firms are helping China construct two nuclear power plants. While British and French companies have won contracts to construct a plant in southern Guangdong Province, other overseas firms have had to settle for comparatively meager sales of nuclear-power equipment.

The size of China's market for nuclear power plants is a fraction of that projected by a plan Beijing outlined in 1985. Then, officials said they would build reactors with a capacity of 10,000 megawatts by the turn of the century.

Beijing has scaled down its plan chiefly because of a shortage of funds in convertible currency, Western diplomats say. Moscow's relative success in marketing nuclear power in China can be attributed primarily to this financial weakness of Beijing, they add. In the absence of hard currency, Beijing must play for the nuclear plant deal by barter.

``We've turned to the Soviet Union for nuclear power because its technology is cheaper, and it's willing to give us the plant on a barter arrangement,'' Fang says.

Both countries should increase their barter trade of other goods too, with the Soviets offering China industrial minerals, lumber, and fertilizer in exchange for textiles, foodstuffs, and light industrial products, say Chinese officials and East-bloc diplomats.

Also, China has already dispatched 5,000 workers to help develop the Soviet Far East. The number of these guest workers should rise significantly in coming years, officials and diplomats say.

Still, there are clear limits to the increase in Sino-Soviet trade. Chinese trade with the Soviets, estimated at $3.26 billion last year, has increased nine-fold since 1981. Poor transport and restrictive, controls on trade and commerce on both sides of the border are likely to discourage the trade that could be expected between advanced, free-market economies, Western diplomats say. Also, both countries are likely to spurn each other's products for goods of higher quality made by capitalist countries, diplomats add.

Still, China's officials are confident that the industry responsible for the 1986 Chernobyl nuclear power plant accident can provide China with a safe reactor.

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