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Last Updated: Sunday, 17 December 2006, 11:39 GMT
China awards massive nuclear deal
Part of an experimental fusion reactor in China
China is stepping up its research and development of nuclear power
Westinghouse, the nuclear-plant builder sold by British Nuclear Fuels earlier this year, has won a billion-dollar contract to build reactors in China.

The deal, worth about $8bn (4.1bn), is for four nuclear plants - two at Sanmen in Zhejiang province, with another two at Yangjiang in Guangdong.

An expected decline in fossil fuels and increasing energy demands have prompted many nations to focus on nuclear power.

Analysts said that the deal may also help soothe trade tensions with the US.

'Relationship driven'

US-based Westinghouse defeated a number of other international companies to win the tender, including France's Areva and Russia's Atomstroiexport.

The fact that Westinghouse is now owned by Japan's Toshiba may also have helped secure the deal, especially after Japan's new Prime Minister Shinzo Abe signalled an intention to restore friendlier ties with China.

"This is all relationship driven," said David Hurd, an analyst at Deutsche Bank.

"The US is putting pressure on China at the moment, so China's response is 'let's throw them a bone,'" he explained.

The US, which is running a record trade deficit with China, estimated that the deal would create more than 5,000 American jobs. At the heart of the deal was the promise of a transfer of technology from the US firm to China, analysts said.

Westinghouse will build AP1000 reactors that should be up and running by 2013, while the transfer of technology means that China would be able to build itself similar reactors.

Nuclear future?

China is having to look at ways of safeguarding its energy independence as world oil supplies are squeezed, and its growing population and booming economy increase its thirst for energy.

At the same time, many experts have claimed that nuclear power is one of the most efficient and environmentally friendly ways of meeting a population's energy needs.

This view is proving controversial and has been contested by environmental groups, which claim that the risks of an accident and cost of dealing with radioactive waste far outweigh any benefits.

Even so, demand for nuclear power plants is on the increase, and the International Energy Agency estimates that more than $200bn will be spent by 2030 on harnessing the atom for energy output.

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