China’s Nuclear Expansion to Exceed Forecast, Japan Steel Says
By Masumi Suga and Shunichi Ozasa

Sept. 7 (Bloomberg) -- Japan Steel Works Ltd., which makes reactor parts for Areva SA, Toshiba Corp. and rivals, more than doubled its forecast for China’s nuclear plant construction because of stimulus spending and environmental pressures.

The country may build about 22 reactors in the five years ending 2010 and 132 units thereafter, compared with a company estimate last year for a total 60 reactors, President Ikuo Sato said in an interview. Japan Steel Works has the only plant that makes the central part of a large-size nuclear reactor’s containment vessel in a single piece, reducing radiation risk.

China, the world’s largest energy consumer after the U.S., is increasing spending on atomic energy as part of a 4 trillion yuan ($586 billion) economic stimulus and as it curbs greenhouse gas emissions. Japan Steel Works is counting on the rising reactor demand as the global recession curbs sales to customers such as carmakers and electronics companies.

“The potential for investment in nuclear power is huge,” said Shi Yan, an analyst at UOB-Kay Hian Ltd. in Shanghai. “Only a small number of companies in China have the right to develop nuclear power projects, but the country is open to foreign companies to help build reactors and to provide equipment.”

Business Talks

“China, which had increased construction of coal-fired power plants, is now trying to focus on nuclear power because of the environmental issue,” Sato, 60, who took office in June, said in the Aug. 31 interview in Tokyo. “China is accelerating nuclear spending, and additional business talks are coming up.”

The country has 9,100 megawatts of nuclear capacity and has approved the construction of additional reactors able to generate 25,400 megawatts, Sun Qin, then-deputy head of the National Energy Administration, said last month. China will issue a plan by the end of the year to push development of clean energy sources such as nuclear, wind, solar and hydro power.

Gross domestic product in China expanded 7.9 percent in the second quarter as the economy rebounded from the weakest growth in almost a decade, boosted by stimulus spending.

“Similar to road and railway construction, nuclear energy is also part of China’s plans for a recovery after the economy slowed,” Sato said.

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