Wang Binghua, Former President of State Power Investment Corporation Limited.
I think it is fitting that we have a strategic dialogue today to seek cooperation on technology innovation. I would like to share with you my experience in a China-U.S. high-tech cooperation project, as well as my advice for continued cooperation between the two sides.
Through international bidding, China in 2003 introduced the AP1000, the third-generation nuclear reactor from Westinghouse. In accordance with the contract, in the following years Westinghouse and other foreign partner companies transferred to their Chinese counterparts all technologies and expertise related to the AP1000’s design, manufacturing of some modules, project management and operation and maintenance. In doing so, they reaped handsome economic benefits and extremely important feedback from the world’s first AP1000 nuclear power plants in terms of construction and operation.
In the construction stage, Chinese and U.S. partners worked together to solve numerous design issues on the U.S. side, and to address challenges posed by extremely strict standards in the manufacturing of main equipment. They also joined hands to deal with the enormous challenges of manufacturing and installing supersized modules and installing main pumps and explosively-opened valves, as well as enormous pressure from project delays. In the end, Westinghouse’s conceptual design for the AP1000 was brought to life with the completion of four units at Sanmen Nuclear Power Station and Haiyang Nuclear Power Plant. In October 2018, all four units were connected to the grid.
Since starting commercial operations, many operational indicators of the units have set world-class standards and their safety record surpasses those of other third-generation nuclear power plants, thus presenting strong economic viability and a competitive edge.
The success of the cooperation is attributable to many factors.
First, the U.S. government and the Chinese government honored their promises and lent strong support to the project. Thanks to active negotiations between relevant government agencies, the U.S. government presented a letter of guarantee to the Chinese government, which was signed by the U.S. secretary of energy and secretary of commerce before Westinghouse took part in the bidding process. The letter confirmed the U.S. government’s support for technical cooperation on the AP1000, reflected the two governments’ commitment to cooperation and provided legal support for long-term cooperation between the partner companies.
Second, Chinese companies have ensured compliance with the laws and regulations that apply to their operations. Since technology transfers began in 2007, these companies have acted in strict accordance with the laws and regulations while staying true to the letter and spirit of the contract. The Technology Licensing Department and Intellectual Property Management Department have been established, and are specialized in protecting intellectual property rights of both Chinese and U.S. companies. Moreover, they conform to rules on the licensing, use, improvement and innovation of U.S. technical patents. In the past decade or more, no business disputes or legal disputes have arisen in the project over intellectual property rights, and through their compliant practices Chinese companies have won the respect and recognition of the technology transferors.
Third, all parties formed a community of shared interest in the process of construction. In fulfilling the contract, all sides worked to seek common ground while reserving differences, adopted a give-and-take attitude and lent support to each other, because their shared goal was to push forward the construction of the plants despite all the obstacles.
In addition, Chinese companies provided good living and working conditions for U.S. workers and their families, who were grateful. Because of numerous design changes, the construction schedule was delayed, and engineers and technicians from both sides had to work overtime, but no one complained. The Chinese and U.S. workers are colleagues, but they are also good friends. During the 10-year construction process, there was no accident involving personal injury or equipment damage on site, and the excellent project management left a deep impression on both the Chinese and foreign teams.
Therefore, I suggest that competent authorities in China and the United States need to work on the following fronts:
First, support the expansion of long-term business cooperation with technology originators. In fact, both Chinese and U.S. companies have a strong aspiration for such cooperation. Since the AP1000 project was put into commercial operation, technical exchanges and cooperation between the two sides have not been discontinued. Despite the many obstacles raised by the raging pandemic, U.S. technicians continue to provide on-site technical services and support at Sanmen and Haiyang.
Second, encourage business cooperation to expand the presence of Chinese and U.S. companies in third countries. This type of cooperation can deliver a strong competitive edge as these firms participate in the bidding of nuclear power projects in other countries, and also can leverage the respective strengths of the two countries and their companies. This is what the business community in China and the United States are eager for, and they have what it takes to achieve success in such cooperation.
Third, together with the partner companies, identify both the success stories and problems in terms of technology transfers and project management in Chinese AP1000 power plants. Building on these success stories and problems, China and the United States can expand their common understanding, address differences and form more consensus on cooperation. As they find the convergence of interests in cooperation, the two countries can eliminate some fixed modes of understanding on certain bilateral issues.
