UK China nuclear decision shows cracks in May's government – or does it?

When newly-installed UK Prime Minister Theresa May's government surprised everyone, not least China and France, by announcing it was reviewing Chinese-backed plans to build a French-designed nuclear power plant in western England, many assumed it was over fears of too much Chinese involvement in the sensitive area of nuclear energy.

The champagne had been laid on, the dignitaries invited and following last Thursday's decision by France's EDF conglomerate to go ahead with its share of funding the 18 million pounds Hinkley Point project, all was set for a quick signing ceremony.

All set, that is, until a few hours after an oft-delayed EDF board decision was taken, when UK Energy Secretary Grant Clark, only a few weeks in the job, announced Britain was reviewing the project and would make a final decision in September.

Many in the UK jumped to the immediate conclusion that fears over security were involved, and pointed to the malign influence of Nick Timothy, one of her closest advisers, who had previously publicly expressed his fears that "the government is selling our national security to China" because of the involvement of China General Nuclear Power Corporation, which is funding a third of the cost.

But what appears to be the main reason for the British government decision is now emerging, and proves that China and CGN were correct in their cautious reaction to the news.

EDF, which has been struggling to fund its share of the project, finally got the go-ahead from its main shareholder, the French government. Originally the EDF board had been due to meet in September, but Jean-Bernard Levy, EDF's CEO, wanted to move quickly after securing the funding, and moved the board meeting forward to July.

May was apprised of this by President Francois Hollande when she visited him in Paris only a week after taking over as prime minister, and she refused to be bounced into an early decision and told Hollande her government would adhere to the September timetable.

May is known in Whitehall as being more cautious that her predecessor, David Cameron, and wanted time to personally evaluate what is after all a controversial project.

Another factor to be considered is that the Hinkley Point project will be completed using only EDF technology and China's input is only financial, so the security question doesn't really apply.

True, there are concerns about security over China's role in future UK nuclear power projects, when Chinese technology is planned. But these can be addressed in a future agreement, with appropriate safeguards built in.

Government officials who don't want to be identified say China was alerted to the UK government's review plan ahead of the French, which probably explains the understanding tone of both the reaction by CGN and the Chinese Foreign Ministry.

What this all does point to is perhaps a mishandling of the situation by Downing Street – Chancellor Philip Hammond, a close ally of Theresa May, was in China when the announcement was made, and had already talked positively about Britain's future relationship with Beijing, particular over the chances of securing a Free Trade Agreement with China after Britain negotiates its departure from the European Union.

He was not aware of the decision to review the Hinkley project, and Foreign Secretary Boris Johnson was also kept out of the loop.

Energy Secretary Clark was only made aware of the announcement he was due to make on Thursday only a few hours after arriving back from a visit to Japan.

May is also known to be concerned about the rising cost of the project – in 2005 it was put at 9 billion pounds.

For China, involvement in the project and subsequent nuclear power stations is seen as boosting the international standards of its own nuclear plants if they pass exacting UK standards, and thus their marketability.

British media reports, including The Times, say CGN has a tentative "plan B" if Hinkley's current project fails to go ahead. That would involve building two smaller Chinese-designed reactors on site, but a whole new agreement would have to be negotiated.

But little has been said about that.

To contact the author: chris@mail.chinadailyuk.com