As Chinese investors make moves to acquire the quickly drowning nuclear firm Westinghouse Electric Co., government officials in Washington are on the edges of their seats.
With China emerging as an increasingly powerful global economic and political player, the acquisition of such a corporation and its technological subsets raises multiple red flags for the Trump administration, which is currently adopting a series of hardline measures against China on trade, administration and security.
Westinghouse recently filed for Chapter 11 bankruptcy protection and is being sold by the Japanese conglomerate Toshiba. This implies that not only is the corporation in dire need of drastic restructuring, redesign and investment, but also that because of the high level of desperation involved in its sale due to the aforementioned conditions Toshiba might be forced to sell it to high-paying Chinese investors for a princely sum in order to avoid significant monetary losses.
However, in addition to the fact that Westinghouse is already a target of Chinese intelligence in order to obtain industrial secrets, Chinese expansion in the field of nuclear technology and security has already led to the construction of more than 20 nuclear reactors and an influx of foreign nuclear know-how in attempts to keep up with and eventually overtake the U.S. in this regard. Westinghouse could serve as an industrial knowledge base that fuels the development of China's nuclear arsenal indirectly, which could stimulate the nation's move towards becoming an increasingly militarized economy.
In 2014, the U.S. Department of Justice indicted five Chinese military hackers for stealing Westinghouse emails and documents related to the Westinghouse AP1000 reactor, despite Westinghouse and a Chinese utility forming a deal to build these plants after Westinghouse agreed to transfer much of the technology behind those plants to the Chinese. This was followed by the enlistment of former Westinghouse scientists last year by a Chinese company to relay confidential technical information regarding the AP1000.
Moreover, while Washington expresses legitimate concerns about national security, a Chinese owned-and-operated Westinghouse could also yield poorer working conditions and less job security for workers in Cranberry, where the company is situated, in order to reduce costs and match Chinese labor standards. Furthermore, with America's nuclear power play as an important political and economic leveraging tool in terms of negotiations and exerting pressure on other nations, to fall below China in this regard would imply a severe degradation of that very power.
The American Committee on Foreign Investment could very well recommend an aversion of the deal, but this would be political and diplomatic suicide in many respects, especially since previous attempts to perforate the American nuclear system by China have been done covertly. The best bet would be to encourage a rival bid from a U.S based company or one which does not wield as much nuclear power- yet, it is questionable whether there even exist viable investors willing to spend as much as the Chinese are on what is considered a dying project.
Unless the administration discovers some sort of legal roadblock that could be employed to undercut the Chinese investors, Washington will remain weary.