US charges of PLA hacking likely to hurt rather than protect American business
Donald Gasper says scrapping of Westinghouse deal would be no bad thing, given safety concerns
Last month, the US Department of Justice launched a highly publicised indictment against five employees of the People's Liberation Army, accusing them of cyberhacking to steal US commercial secrets.
This came - was it merely coincidence? - just after the exposure by former US intelligence contractor Edward Snowden of further details of massive spying activities by American intelligence agencies, involving targets on several continents.
The US allegations have been vigorously rejected by the Chinese side. Whatever the truth, it seems the United States may have inadvertently damaged its own commercial interests while arguably doing China a favour.
Among the US accusations was one concerning a PLA employee named Wang Dong, who reportedly goes by the colourful nickname of "UglyGorilla".
He is supposed to have stolen from Westinghouse Electric, the US company controlled by Japan's Toshiba, plans for its next-generation nuclear reactor. According to the indictment, starting from 2010, at least 1.4 gigabytes of information were stolen from the company's computers. That's the approximate equivalent of 700,000 pages of e-mails and attachments.
There's just one thing the Department of Justice investigators appear not to have been aware of, however: Westinghouse was on the verge of clinching a deal to build eight of its new AP1000 reactors in China. Reuters reported on April 21: "China may sign as early as next year the first of several contracts for eight new nuclear reactors from Westinghouse Electric Co, as the government presses ahead with the world's biggest civilian nuclear power expansion since the 2011 Fukushima disaster in Japan."
Together with the supply of services and spare parts, the deal could yield US$24 billion in profits for the US side. Westinghouse had earlier signed an agreement to voluntarily transfer all the know-how behind the new reactor to its Chinese customers.
Sharing the technology was a condition insisted on by the Chinese side before it agreed in 2007 to grant Westinghouse a contract for four AP1000 reactors currently being built in China. The first batch of records, about 75,000 documents, was transferred to China as long ago as 2010.
The obvious question arises. Why should anybody on the Chinese side go to the risk and trouble of hacking into data from Westinghouse when the company was already providing the blueprints to its Chinese customers?
Of course, we cannot rule out that the right hand was acting without knowing what the left hand was doing.
This kind of thing happens in bureaucracies and neither China nor the US is immune from such situations.
In any case, if one side is commissioning the construction of nuclear power stations by the other, it does seem legitimate for it to be fully in the picture regarding all the possible costs and risks. Technology transfer is a key issue for safety reasons.
Serious doubts exist among Chinese experts as to the way in which these latest reactors were commissioned and questions are being asked about how reliable they really are. This is apart from the issue of the delays to the existing projects and the way in which the cost has ballooned.
Experts say the projects face huge difficulties related to unfinished technical solutions proposed by Westinghouse: since the Three Mile Island nuclear disaster, there has been a long hiatus in construction of nuclear power plants in the United States itself, which has resulted in the loss of the needed professional skills, seriously lowering the ability of US atomic scientists to solve problems promptly and adequately.
The fact that Westinghouse does not have its own basic production capacity has forced the company to organise a complicated chain of suppliers of different equipment and materials, some of them from other countries.
The resulting problem of the mismatch of equipment has resulted in delays, which is why the building of the existing US reactors in China is one year behind schedule.
There has been an intense debate on the mainland regarding the wisdom of going for the untested AP1000 reactor. Last autumn, Li Yulun, a former vice-president of the China National Nuclear Corporation, voiced his concern about the safety standards of the new reactors. He pointed out that in Britain, the Office for Nuclear Regulation rejected in 2011 Westinghouse's new model precisely because it was untried.
In view of the latest US accusations, China is now reportedly considering cancelling the contracts with Westinghouse.
So, to use a Chinese saying, the US side may have picked up a rock only to drop it on its own feet. However, from the point of view of safety, this might turn out to be no bad thing.
