The Chinese Premier Wen Jiabao’s visit to Pakistan this December stirred no action on the issue most in the international community awaited - the China-Pakistan Civil Nuclear Deal. The buzz kick started two years ago and the deal was signed early this year. Here is a repertoire of concerns and arguments that it has generated.

What is the Deal?
China-Pakistan civilian nuclear cooperation began in the late 1970s with distinct nuclear proliferation dynamics that were confirmed in 2004 by the AQ Khan revelations. The Sino-Pak nuclear deal currently in debate relates to the construction of two new nuclear power reactors, in addition to one already existing and a second being completed, at Pakistan’s Chashma Nuclear Power Complex.

The Chashma complex has two 300 MW Pressurised Water Reactors (PWR) constructed with Chinese assistance, under the Sino-Pak nuclear cooperation agreements signed in 1991 and 2003. CHASNUPP-1 is already operating. CHASNUPP-2 would become operational by end-2010. The reactors were supplied by the China National Nuclear Corporation (CNNC); its designs are based on China’s Qinshan reactors, developed by the Shanghai Nuclear Engineering Research and Design Institute (SNERDI). The reactors are operated by Pakistan’s Atomic Energy Commission (PAEC). Fuel is imported from China. Both reactors are under IAEA safeguards.

In June 2008, Pakistan announced plans for Chashma 3 and 4, following a framework agreement with CNNC in November. SNERDI finalized its design contracts in April 2009. A fuel supply agreement was signed on 30 September 2009. CHASNUPP-3 and CHASNUPP-4 will be PWRs of 320MW capacity each. These will be supplied by the CNNC at a cost of US$1.7 billion, of which US$1.07 billion will be raised from international loans, mainly from China. Hence, China will not only supply the reactors and their fuel but also finance their construction. The deal was signed between PAEC and the Chinese contractor, Zhongyuan Engineering Corporation (ZEC), in March 2010 when President Zardari visited China. Reports of Chinese plans to construct a one-gigawatt nuclear reactor in Pakistan are now doing the rounds. 

What are the international and Indian concerns?
The China-Pakistan civil nuclear deal is a secret deal. Neither party has gone beyond the rhetoric of peaceful nuclear cooperation, leaving the international community guessing about its nature, terms and conditions. Clarifications sought at the 2010 NSG Plenary Meeting in Christchurch were met with flimsy excuses by Chinese officials. Analysts point out that having failed to mention Chashma 3 and 4 at the time of joining the NSG in 2004, China will be violating the NSG guidelines that prohibit certain nuclear exports to non-NPT states. Pakistan does not adhere to the NSG’s full scope safeguards and had harshly criticized the Indo-US Nuclear Deal for paving the way for more such deals and undermining nonproliferation norms. 

India recognizes Pakistan’s right to peaceful nuclear energy but shares international concerns that the Sino-Pak deal frees up Pakistan’s indigenous nuclear fuel for its military programme. For India, the greater concern is with activities at Pakistan’s Khushab nuclear complex where growing plutonium stockpiles feed its weapons programme. Nuclear proliferation has been a doppelganger in previous China-Pakistan civilian nuclear cooperation. The opaque nature of the current deal has therefore led certain analysts to suspect that it could provide scope for continued China-Pakistan proliferation activities.

Pakistani and Chinese Arguments
Pakistan has two principal explanations. First, the China deal is designed to meet Pakistan’s energy requirements of 160,000 MW by 2030, of which 8800 MW will be met by nuclear power generation. The second argument is a political one and it justifies the deal on grounds of ‘equal treatment’ with India. The US has denied a nuclear deal to Pakistan similar to the Indo-US deal.

China argues that the supply of Chinese reactors was ‘grandfathered’ under its bilateral agreements of 1989 and 2003 (predating China’s entry into the NSG). The deal is described as compliant with the IAEA and NPT guidelines. China’s equity argument alleges that the Indo-US Nuclear Deal destabilized the Indo-Pak equation; it is now providing Pakistan an equal opportunity that could stabilize the South Asian situation. Besides, China has a longstanding commitment to develop Pakistan’s nuclear energy infrastructure, while leveraging its own position vis-à-vis the US.   

To wait and watch
The Indo-US deal occasioned advancing the Sino-Pak case. But the argument that the former triggered the latter is inconsistent with the claims that China committed to ‘grandfather’ the supply of new reactors under agreements dated prior to the Indo-US nuclear engagement. Mark Hibbs, a nuclear expert on South Asia with the Carnegie Endowment for International Peace, has charted four options for China: Delay the deal, stick to the ‘grandfather’ argument, seek exemption for Pakistan or ignore the NSG guidelines. Pakistan wants an NSG exemption on grounds of equal treatment. This is unlikely given Pakistan’s proliferation record but also because China is reluctant to press its case with the NSG. The secrecy surrounding the deal stirs suspicion as to its intentions and fuller implications.