Securing power in the South China Sea: Beijing’s plans for floating nuclear reactors get US$150 million boost

China has announced plans to bolster its maritime nuclear capabilities with the creation of a major new joint venture project, which could also provide the catalyst for the development of floating reactors in the South China Sea and beyond.

State-owned China National Nuclear Power announced on Thursday it was establishing the new company – with registered capital of one billion yuan (US$150 million) – in cooperation with Zhejiang Zheneng Electric Power, Shanghai Guosheng Group, Jiangnan Shipyard and Shanghai Electric.

The joint venture will seek to strengthen China’s nuclear power capabilities in line with its ambitions to “become a strong maritime power”, the company said in a statement.

It will also support China’s “Belt and Road Initiative”, which aims to boost trade and infrastructure links with nations across Asia and Africa.

The statement did not say how or where the technologies will be used, but observers said it is likely they will be deployed in areas such as the South China Sea.

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In a separate notice the state power giant said the new company will also seek to promote the development of nuclear-powered vessels.

Wang Yiren, vice-director of the State Administration for Science, Technology and Industry for National Defence, said earlier this year that the expansion of China’s nuclear energy capabilities was a vital part of its five-year plan. The country will prioritise the development of a floating nuclear power platform in order to support its offshore oil and gas activities, and its presence in the Paracel and Spratly Islands, he told state media.

Wang’s comments came after Beijing said in a white paper last year that it was developing floating nuclear power plants to facilitate the exploration of maritime resources.

China Securities Journal reported last year that China could build up to 20 floating nuclear plants in the region to “speed up the commercial development” of the South China Sea.

Beijing has increasingly been flexing its muscles in the South China Sea, with the development of artificial islands and more frequent naval patrols. It has declared sovereignty over 85 per cent of the region and is engaged in multiple territorial disputes with its neighbours.

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Collin Koh, a military expert from the S. Rajaratnam School of International Studies at Singapore's Nanyang Technology University, said maritime nuclear power plants have a wide range of uses, and their presence would have both symbolic and practical purposes.

As well as producing electricity for Chinese infrastructure in the disputed waters, they could offer a long-term solution to the country’s water supply problems with the provision of desalination facilities, and support China’s status as a maritime power, he said.

Such facilities will also enable China’s military to take a step closer to developing a nuclear-powered aircraft carrier, he said.

“China sees securing the ability to develop marine nuclear tech as a manifestation of its maritime power status,” Koh said. “It will enhance Beijing’s staying power and assert its claims, as military garrisons and civilian personnel living on those remote outposts would be able to sustain themselves better [and therefore stay longer].”

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Carlyle Thayer, a regional security expert at the Australian Defence Force Academy, said that if nuclear power plants were built in the South China Sea, Beijing would have to provide security for them.

“It makes living conditions and life there much improved, and it’s a sign of Chinese permanence,” he said. “The more infrastructure China puts on there ... they can say, we’re only doing necessary defence to protect our people and our facilities.”

Although the nuclear power plants would have both military and civilian uses, it would “raise the cost of the conflict” in the region, he said.

Kai Ji-jung, chair professor of nuclear engineering at City University of Hong Kong, said that while the technology for floating nuclear plants is not yet mature, countries such as China and the US are putting “tremendous amounts of effort” into developing it.

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Floating plants are typically much smaller than onshore ones, with no more than a quarter of the electricity production capability, he said.

“Their purpose is to be mobile, so they can float to any harbour or any island, so you have remote electricity,” he said.