Despite objections from anti-nuclear campaigners, Japan’s government on Friday cleared the way for companies that build nuclear power plants to sell their technology to India — one of the few nations planning big expansions in atomic energy — by signing a cooperation agreement with the South Asian country.
The deal is a lifeline for the Japanese nuclear power industry, which has been foundering since meltdowns at the Fukushima Dai-ichi power plant in northeastern Japan in 2011. Plans to build a dozen new reactors in Japan were canceled after that, a gut punch for some of the nation’s biggest industrial conglomerates, including Toshiba and Hitachi.
With the domestic market moribund, Japanese companies had been pursuing deals abroad, but success was elusive.
Photo: Kyodo News via AP
The economic case for nuclear energy has weakened as a result of low oil and gas prices, prompting utilities and governments around the world to rethink construction. The Fukushima disaster increased safety concerns and Japanese vendors have had to fight lower-cost rivals from places like Russia and South Korea for a shrinking number of customers.
India looks like a rare opportunity. It is planning 20 new reactors over the next decade or so, and as many as 55 more have been proposed. Japanese Prime Minister Shinzo Abe and his Indian counterpart, Narendra Modi, are hoping that trade can underpin a broader strategic relationship, aimed in part at fending off China.
Nonetheless, the nuclear deal has drawn criticism in Japan. India possesses atomic weapons and has kept itself outside the international legal framework against proliferation. Because of that, many in Japan, which was hit by two nuclear bombs in World War II, would prefer not to establish ties with nuclear power.
Left-leaning Japanese newspapers have published editorials against the Indian deal, and the mayors of Hiroshima and Nagasaki, the bombed cities, have issued pleas to stop it.
Formal negotiations by the two governments lasted six years. Other countries have already begun allowing nuclear-related exports to India, including the US, which signed a similar accord a decade ago.
“There was a huge outcry when the government first said it would pursue this” in 2010, said Masaaki Fukunaga, a professor at the Center for South Asian Studies at Gifu Women’s University in Gifu, Japan, who has followed the issue closely. “The industry and the government were determined.”
Abe said Japan had reserved the right to stop nuclear exports if India conducted another nuclear weapons test.
“There is a legal framework to ensure India’s responsible and peaceful use of technology,” he said.
Japanese leaders say they are looking to support more than just the nuclear industry. National economic growth may be at stake. As Japan has become less competitive in sectors like consumer electronics, big industrial projects are being counted on to fill the gap.
In addition to the nuclear accord, Abe and Modi agreed to explore plans to build additional high-speed rail lines in India based on Japan’s Shinkansen bullet-train technology. Construction on a previously agreed line from Mumbai to Ahmedabad will begin in 2023, the leaders said. Japan will help finance the project with low-interest loans.
Japan’s push to become a global infrastructure powerhouse has had setbacks. Vietnam’s legislature scrapped plans in 2010 for a Shinkansen train line, citing costs, and is reportedly close to canceling plans for a proposed Japanese-built nuclear power station. Indonesia chose a Chinese group’s bid last year to build a high-speed rail line over a Japanese bid that had been considered the favorite.
South Korea underbid Japan to win a contract to build the first nuclear reactors in the United Arab Emirates. And Tokyo Electric Power, owner of the ruined power station in Fukushima, pulled out of a bid to build and run a nuclear power station in Turkey. A Japanese-French consortium ultimately won the Turkish contract in 2013, after a strong diplomatic push from Abe, but it remains the only successful Japanese nuclear-plant sale since the Fukushima accident.
The bet on India is no sure thing. Nuclear plants can take decades to plan and build, and proposals to develop them are vulnerable to political and economic shifts. The Indian government must find new locations for some proposed plants because of local protests, and even for countries that have already signed nuclear trade agreements with India, little actual business has materialized so far, in part because of an Indian law that opens hardware vendors to potentially unlimited liability claims in the case of accidents.
India has been working with the US and other countries to create a framework for minimizing vendors’ liability risk, including the creation of a domestic accident compensation fund. Officials hope to complete it next year.
If that hurdle can be overcome, the first Japanese company to benefit from the agreement with India will most likely be Toshiba, whose US subsidiary, Westinghouse, has won conditional approval to build six reactors in India. Westinghouse uses components from Japan, including reactor-containment vessels built in Japanese steelworks, so the deal signed on Friday is essential to moving forward.
Toshiba needs the boost. It acquired Westinghouse in 2006 for US$5.4 billion, a princely investment upon which it was struggling to earn a return, even before Fukushima, and is under investigation over a US$1.2 billion accounting scandal last year.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last