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  • Dec 20, 2014
  • Updated: 7:25am
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SINO-US RELATIONS

US cyberespionage charges may cool Westinghouse's China nuclear deal

Business ties at risk after Washington accuses five PLA officers of hacking

PUBLISHED : Thursday, 22 May, 2014, 4:33am
UPDATED : Thursday, 22 May, 2014, 4:33am
 

China may consider postponing negotiations for buying eight nuclear reactors from an American nuclear company embroiled in a US indictment of five PLA military officers for alleged cyberespionage, Chinese experts say.

The deal, together with parts and services, would potentially be worth more than 24 billion yuan (HK$30 billion) and create thousands of jobs.

Five cybertechnology experts, allegedly from the People's Liberation Army's Shanghai-based Unit 61398 that has been accused of being a major source of cyberattacks abroad, are now wanted by the FBI for hacking into a number of US firms, including Westinghouse Electric, the company tendering to supply the Chinese nuclear power plants.

Beijing angrily denied the charges against the five and said the accusation would damage Sino-US ties.

Watch: China accuses US of 'hypocrisy' as hacking row escalates

Professor Gu Zhongmao, deputy science and technology director of the China Institute of Atomic Energy, said Westinghouse's involvement in the indictment came as a "big surprise" because the company was known to have maintained good relations with the Chinese government.

He said that before the incident, the Westinghouse tender was leading the competitors as their generation III AP1000 reactor had been regarded as the most promising candidate for China's new national standard.

Gu, who is not directly involved in the negotiation but advises Beijing on nuclear policy, said the incident could affect Westinghouse's ties with Beijing.

"Unlike other businesses, the contracts of nuclear projects are largely determined by politics due to their enormous investment and sensitivity to national security," Gu said. "Politics plays a bigger role in a deal than technological or financial concerns."

Professor Cai Cuihong, from Fudan University's Centre for American Studies, agreed.

"China will likely postpone the negotiations with Westinghouse and turn to other countries for the nuclear reactors if the US insists on the indictment. This will be an example of how bad politics affects good business," said Cai. The centre advises central government leaders on Sino-US relations.

Westinghouse has remained silent since the indictment, and its Chinese office and US headquarters have not responded to questions from the South China Morning Post.

Westinghouse spokeswoman Sheila Holt was only quoted by the Pittsburgh Post-Gazette as saying that the company "wasn't expecting" the indictment and could not comment on it before thoroughly reviewing it.

The company's Chinese partner, the State Nuclear Power Technology Corp (SNPTC), was also cautious.

Zhu Shutang, a senior project manager at the SNPTC's Beijing headquarters, said the incident would not affect contracts that had already been signed between the two companies.

"Our contracts had been signed under the political agreements between the Chinese and the US governments. I don't think [the indictment] will make a dent," he said.

Meanwhile, in an interview with CNN, China's ambassador to Washington, Cui Tiankai, said the US was guilty of the same allegations it had levelled against China, and that China had been a victim of US cyberattacks.

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This article is now closed to comments

aazar.kund
As you sow so shall you reap, Once US used to have hegemony over global espionage. Its cyber security forces and hackers were widely involved in global hacking and still they are. But today other states like China are reacting in same way. It was the grave mistake from US to not agree global community over cyber laws. Even US was not ready to sign any law prohibiting cyber breaches. Today US is paying the cost for that.
tooba.mansoor.5
This is what actually internationally community should respond to what USA national security agency did for the sake of protecting its national security interest. At least China has shown some courage to respond to USA the same way as it did. This is the most crucial time for USA as it has already been caught up in severe situations where at one side it is dealing with Ukraine and now on the other side it has to confront this issue of China. The deal of Westinghouse power plants is not the last one.China has maintained friendly relations with almost every country it can have the same ventures and favors from other countries.
tony.arron.7
When the US wanted to be the super power to control the global political, military and economic resources it adopted all the sources to gain power. Now, no wonder that China is emerging and will adopt all means to gain power. No state can deny the Chinese economic and technological power. The only viable option for the US is to opt friendly relations with China and admit that China has become a major center of power along with multiple others.
ldAsia
Revenge for "Snowden Syndrome" - everyone in the universe knows that it is the other way around. Their NSA have been snooping everybody (including the leaders in other countries) in the world for decades. They are now trying to use China as their scapegoat to smooth the world - to cover their acts. To people with brain cells - it is a freaking BIG joke. However, the bone heads will believe this though!
sashal.homy
If we turn the table other way around, couple of months ago the whole world was shocked by the Global Espionage that is done by National Security Agency of US. How US would address this alleged Chinese Cyber hacking in the backdrop of Edward Snowden? Certainly, it would deteriorate the relationship of two countries. US is actually in a fix because of Crimean issue and Russian growing ties with China. US policy makers are really experiencing the tough times since Cold War in back century.
Loupgarous
Time for America to stop selling technology to the Communists. They'll never be anything BUT the Communists, and it's also time for us to end the multi-billion dollar a year trade deficit with mainland china.
Loupgarous
Time for America to stop selling technology to the Communists. They'll never be anything BUT the Communists, and it's also time for us to end the multi-billion dollar a year trade deficit with mainland china.

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