China Signs Accord for Big Nuclear Plant

China signed a contract Friday with a Hong Kong utility to build the first of a series of large-scale nuclear power plants that it has proposed in the hope of easing its energy problems.

Under the contract, an 1,800-megawatt plant will be built at Daya Bay, near China’s border with Hong Kong. Construction is expected to take about seven years.

It is the largest single joint venture China has ever agreed to since it opened its doors to foreign investment. The total cost is expected to be more than $3 billion.

The Daya Bay plant will be unique among the power plants China is planning because it will sell 70% of its power to Hong Kong.

The contract gives China a 75% interest in the Daya Bay project through the government-owned Guangdong Nuclear Investment Inc. China Light & Power Co. Ltd., the Hong Kong utility, will have the other 25%.

Intense Competition

Creation of the joint venture was the first step in the process of awarding contracts for reactors and other equipment.

The prospect of a big new building program for nuclear plants in China has touched off intense competition among French, West German, Japanese and American companies to win the contracts for nuclear equipment.

Chinese officials have been talking for several years with the French company Framatome about the possibility of supplying reactors for the Daya Bay plant, and many in the nuclear industry believe the French firm will win the contract.

American nuclear suppliers have all but conceded that Framatome will be awarded the Daya Bay contract, and they have been trying for the past year to get into position to win contracts for a nuclear plant proposed for Jiangsu Province. But American nuclear firms are barred from doing business in China at the moment because of the lack of a nuclear cooperation agreement between the two governments.

A nuclear agreement was announced when President Reagan was visiting China last April, but the United States has never given its final approval. The measure ran into trouble after critics in Congress charged that China is helping Pakistan in its effort to develop nuclear weapons.

China has repeatedly denied this charge, and Chinese officials chose the occasion of the signing of the Daya Bay contract to raise the issue again.

“We have no intention, either at present or in the future, to help non-nuclear countries develop nuclear weapons,” Vice Premier Li Peng told the New China News Service.

Li added that nuclear energy will be only a supplement to other sources of energy in China, such as hydroelectric power.