U.S. Dollars Fuel China Nukes

As first reported by Tim Carney on March 2, the U.S. government’s Export-Import Bank has given preliminary approval to $5 billion in direct loans or loan guarantees to the China National Nuclear Corp., a Chinese government agency with a history of proliferating nuclear-weapons technology to Iran and Pakistan.

In response to follow-up inquiries by HUMAN EVENTS, the White House has been coy about the issue.

White House Press Secretary Scott McClellan on March 14 said, “If you’re talking about peaceful civilian purposes, that’s one matter. If you’re talking about proliferation, that’s another matter.” When asked specifically about the CNNC’s reported assistance to the nuclear weapons programs in Pakistan and Iran, McClellan said he would read the report and noted that the U.S. has “acted in certain instances when there have been companies in countries like China that have violated our export controls.”

After he had seen the report, McClellan said the next day, “I just checked into it initially and my understanding is this is a preliminary proposal. It still has not been adopted.”

On March 17, when asked whether Ex-Im would place a hold on the China deal, McClellan said: “The Export-Import Bank can probably talk to you about these issues. . . . I don’t know all the specifics of this particular issue. I think you brought it up in the context of concerns about proliferation.”

McClellan went on to say there are other government offices “that do look at the proliferation concerns. And before anything like that happens [the Ex-Im loans to China’s nuclear power agency], they want to make sure that there is not a concern about proliferation. And so . . . they can talk to you about the preliminary plans they put forward in more detail.”

Similarly, National Security Council spokesman Frederick Jones told HUMAN EVENTS to “contact the Ex-Im Bank” regarding the status of the loan guarantees.

So is President Bush for or against Ex-Im’s proposed deal with China’s nuclear power agency? Will he let it go forward? Or will he stop it? The answer is not clear.

Ex-Im spokesman Brett Decker said the bank’s five-member board voted in February to give preliminary approval to the loan and loan guarantees. “Generally,” he said, “an approval can be converted to a final commitment after the applicant has finalized its financing package for the deal.” However, he said, “a further detailed examination of the proposed transaction will take place.”

Vice President Cheney may have provided the clearest indicator yet of where the administration is headed on this issue. In Beijing last March, he pushed for the Chinese government to contract with Westinghouse–a company owned by the British government–to build four new nuclear reactors at a cost of $1.5 billion each. Asked about the proposed deal, Vaughn Gilbert, a spokesman for the Westinghouse reactor vendor in Pittsburgh, told the Associated Press: “Clearly the China market is very important to the industry and a supplier like Westinghouse. The Chinese market is one that we are pursuing.”