go to website The international stage is shifting. No longer does the spotlight focus solely on the world’s transatlantic relationships, between the United States and their European partners. The new tri-lateral nuclear deal between the United Kingdom, France, and China is a critical piece of the world’s new jigsaw puzzle of international relations, pointing to a rearranging of international trade alliances. As the United States “pivots to Asia”, prioritizing their assets in the Pacific, China sets their sights on the Atlantic, taking this opportunity to strengthen their relationships with key Western states.
take a look at the site here Signed on October 21st by British Prime Minister David Cameron and Chinese President Xi JinPing, this nuclear deal centers around three new nuclear power stations to be built in the U.K. over the next decade. With a nuclear plant to be constructed not only at Hinkley Point, but also at Sizewell, and at Bradwell, two other locations in the south of the U.K., this deal has now become the world’s costliest nuclear power deal. Importantly, all three are joint ventures between the British government, French electricity firm Electricité de France (EDF), and Chinese nuclear firm China General Nuclear Power (CGN). However, as many other parties have hinted, this knot in this new tripartite alliance may not be as tightly tied as one might expect, considering two of the three parties are investing more than fifty billion dollars in Britain’s infrastructure.
For the French firm EDF, and thus the French government, this new project has generated quite a bit of excitement. In recent years, France’s nuclear industry has been flagging, with the leading French nuclear energy company, Areva, reporting net losses for the fourth year in a row. Both Areva and EDF were also accused of mismanaging their other projects in Europe after exceeding their budget by billions of euros a number of times. However, these new opportunities mark a chance for them to reverse their financial free-fall of the past few years, as they bet big—to the tune of nearly thirty billion—on the success of this project. Nonetheless, the journey to this point has not been smooth, with many long-term investors and top-tier partners pulling out in 2014, leaving EDF searching desperately for help. Most tellingly, EDF attempted to reach out to potential Middle Eastern partners, but when none showed interest, CGN swept in. Thus, while Franco-Sino relations may be an important part of this deal, it is unclear exactly how strong the relationship between these two key partners actually is.
Similarly, for the U.K., this deal comes as at a critical time in their development. As Britain’s northern oil reserves continue to be depleted, nuclear power is seen as an important, carbon-free alternative, helping to diversify the country’s energy supply. In addition, their older reactors are beginning to show signs of aging, so these new reactors are essential parts of their future infrastructure plans. However, many analysts have argued against the involvement of the Chinese in this new deal, citing concerns about industrial and domestic security, as well as Chinese firms’ poor track record regarding mistakes. Unfortunately for the British, without the billions of dollars of being invested in the project by the Chinese, they would find themselves in dire straights. Because they have not built a new power station since 1995, they have created for themselves a complete lack of domestic options. Thus, they have created a situation in which they have no choice but to look to foreign firms and investors as they attempt to solve their domestic infrastructure woes.
For China, on the other hand, this new deal is an incredible economic and political opportunity, one which will have significant impacts on the future of international trade. Historically, Chinese firms attempting to compete on the international stage have suffered from problems of reputation. A lack of multilateral and internationally-applauded trade deals stem in part from a lack of trust in Chinese firms and investors. For example, the Chinese’s frenzy to invest in growing markets in Africa was widely viewed as a set up for political maneuvering, as they in many ways supplanted the U.S. in the region. Questions also arose about their willingness to compromise on critical human rights issues for the sake of continued economic growth, and the implications of this for many of Africa’s conflict-torn states. However, this new tripartite deal with two of the world’s most powerful and esteemed nations marks an important shift in the realm of international trade. Not only will this deal open many doors for Chinese firms in Britain and France, and thus the rest of the world, it also gives a much-needed sense of credibility to Chinese firms and investors, particularly in the nuclear industry. As China is far and away the most ambitious nation with regard to the growth of their nuclear program, this is another important step for the Chinese, as they have been struggling to expand their reach in this industry. Despite efforts to plan or build more than 60 commercial reactors, everywhere from Pakistan to Romania, Chinese nuclear contractors have to date only managed to secure a very small number of confirmed projects. However, this new deal has the power to change all of that, by giving the Chinese a considerable amount of industry knowledge and experience.
As this new tripartite trade deal between the U.K., France, and China has demonstrated, the puzzle of international trade relations is neither simple nor fixed. With the United States’ focus in the Pacific, China has pounced in the other direction, stretching their reach to build stronger relationships in Europe. This deal, in particular, has had profound effects on the status of Sino-European relations, effects that will continue to be felt for many decades to come. Has Britain made a critical error, allowing, not one but two, foreign nations to take on important roles in their energy infrastructure? How will China’s new resources, both the tangible trade deals and the intangible knowledge gained, affect the power balance of international trade? More importantly, is it a forgone conclusion that the United States has permanently prioritized the Pacific over the Atlantic? Or will its focus shift once again, as it maneuvers across the board from its grand rival in the East?