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As Prepared

Good afternoon, everyone.  It’s a pleasure to join such a distinguished group of panelists to talk with such important leaders in a critical sector of the high-technology global economy.

We are today at a potentially transformative point for the civil-nuclear sector.  We are far removed, of course, from the days in which U.S. civil-nuclear suppliers dominated the international market for nuclear power generation and services.  Since those days, we have had to grapple with the rise of global competitors in this sector — less on a legitimate “level playing field” basis of free market competition than on a market-skewing basis of state sponsorship and subsidization intended to tilt that field as much as possible in favor of national champions.

Largely as a result of this, the American nuclear sector has lost ground in the international marketplace.  Worse still, the governments of the People’s Republic of China (PRC) and Russia have used state-sponsored competitors of the American nuclear sector as tools for strategic influence.  In the Russian case, cut-rate reactor builds and package deals have been used to create strategic dependencies intended to yield exploitative profits on the back end for services, fuel, and support, while opening host governments to Kremlin manipulation and coercion.  The PRC, meanwhile, uses predatory lending terms that create debt sustainability risks and provide the Chinese Communist Party with another tool for expanding its geopolitical influence, as it works to bring more and more countries into a high-tech 21st century analogue to the Chinese Empire’s ancient “Tribute System” of demanding deference and signs of fealty from surrounding peoples.  All of this cannot but be of profound national security concern, especially in today’s era of renewed and accelerating great power competition.

But even while facing these headwinds, and as the role of the U.S. civil-nuclear sector in world markets has diminished, in some important ways we have gotten much better at what we collectively do.  Our civil-nuclear relationships today, for instance, have unprecedented nonproliferation integrity, with the United States having become the global leader in responsible supply.  We have been successfully rectifying the mistakes of past enthusiasms, for example — dating from when excitement about spreading the “benefits of the peaceful atom” outran concern about the potential proliferation implications of such transfers — by walking back the global spread of research and power generation reactors fueled by highly-enriched uranium (HEU), often weapons-grade.  In recent decades, the United States has spent upwards of a billion dollars converting reactors around the world from HEU to low-enriched uranium (LEU) fuel and in repatriating almost seven tons of HEU fuel to its countries of origin.  Today, 33 countries and Taiwan have become HEU-free as a result.  In addition, 74 reactors or isotope production facilities in nearly 40 countries have been converted from HEU to LEU, 32 have been shut down entirely, and the sector has moved into much more proliferation-resistant designs.

In our nonproliferation policy over the past decades, moreover, we have moved beyond questions simply of technology and material into also supporting critical areas of oversight and international accountability. Today, we insist in our own civil-nuclear relationships upon strong nonproliferation assurances that include compliance with full International Atomic Energy Agency (IAEA) safeguards, including the Additional Protocol (AP). We are also leading the global effort to solidify IAEA Comprehensive Safeguards Agreements and the AP, together, as the global standard for safeguards — as well as a condition for supply, without insistence upon which, I should be very clear, a national supplier cannot any more be considered to be a responsible one.

The American civil nuclear sector is also the global benchmark for nuclear safety and security, here too setting a pace that puts us out in front of all competition, and that others must now strive to follow if they are to be considered responsible suppliers.  We are also the foremost promoter of — and provider of funding for — nuclear security and safety initiatives at the IAEA, and for several years have been prodding that institution to do more in this critical area.

In an arena in which supply contracts can create 50- to 100-year relationships over the lifetime of a reactor unit, getting these points right is not an option.  Rather, demanding fidelity to such nonproliferation, safety, and security standards is an imperative.  We are proud that in the United States, we are setting the global standard in all of these respects; the international community must now demand that other suppliers follow suit.

Another reason for both pride and optimism is that the U.S. civil-nuclear sector still provides the most advanced technology available, at the top of the global pyramid in safety and reliability.  Critically, moreover, U.S. firms are also at the forefront of developing the civil nuclear technology of tomorrow — not least in leading the move to small modular reactors (SMRs) that will soon offer advanced, affordable, flexible, quickly-deployable, proliferation-resistant, and grid-appropriate power solutions for markets all around the world.  This is very exciting, not just because of the bright future it suggests for the U.S. civil-nuclear sector, but also for the great promise these developments have in offering clean energy solutions for a world that is, thanks to climate change and air pollution, ever more badly in need of them.

Meanwhile, in contrast, nuclear suppliers backed by and acting on behalf of the authoritarian regimes of the PRC and Russia supply second-rate equipment to their civil-nuclear customers, and all too frequently cut corners in safety regulation in favor of sectoral expansion in pursuit of profit and strategic influence.  To date, their domestic nuclear overseers still resemble promotional boards and advocacy institutions more than they do state-of-the-art actual safety regulators such as the U.S. Nuclear Regulatory Commission.

(This is why, for instance, Chinese Communist Party officials are so keen to pressure foreign governments to permit the “Hualong One” reactor design — which itself most likely incorporates some technology stolen from the United States — to enter service at least somewhere in the West, in the UK or Argentina for example.  Beijing knows that if it is to compete in non-Chinese civil-nuclear markets, it needs to get a Western nuclear regulator to give Chinese reactor designs some appearance of legitimacy, since people quite properly distrust regulators in China who first and foremost must obey the Party’s orders, even if that effort comes at the expense of nuclear safety and reliability.  We should all be very careful not to play into Beijing’s hand here; Western publics should not be used as guinea pigs for testing Chinese reactors that are being promoted in support of the Communist Party’s geopolitical ambitions.)

The world has also learned much in recent years not just about recklessness and incompetence within the Chinese and Russian civil-nuclear sectors, but also about those institutions’ deep complicity in more sinister activities that no right-thinking person should support.  The China General Nuclear Power Company (GCNPC), for example, was indicted in U.S. courts in 2016 for stealing U.S. nuclear reactor technology.  We also know that the PRC’s nuclear sector has been diverting such foreign-acquired technology to help develop propulsion plants for next-generation ballistic missile submarines with which to threaten capitals such as Washington, Moscow, London, Paris, and New Delhi, and for aircraft carriers with which to threaten China’s littoral neighbors, as well as to develop floating nuclear power plants that will facilitate Beijing’s illegal occupation and militarization of the South China Sea.

At the same time, the Russian nuclear sector has been dismayingly involved in producing absurdly dangerous unshielded powered nuclear weapons, such as the 9M730 Burevestnik (a.k.a. “Skyfall”, also known as the “flying Chernobyl”) nuclear powered cruise missile and the Poseidon nuclear-powered underwater drone torpedo terror weapon. We saw some of the fruits of this reckless work on novel strategic nuclear weapons delivery systems all too tragically in August 2019, when botched Russian efforts to recover a Burevestnik test unit from the sea near Severodvinsk — where the Kremlin had already let its crashed, unshielded nuclear reactor smolder on the sea floor near a civilian population center for a full year — resulted in a criticality incident that destroyed a salvage barge and killed a number of Russia’s top nuclear scientists. Such ugly episodes highlight both that our so-called “civil-nuclear” competitors in Russia and China are spectacularly irresponsible players, and that they contribute powerfully to the growing national security threats that today face the democracies of the Western world.

Accordingly, it is clearly well past time for global civil nuclear markets to turn away from those PRC and Russian suppliers, and thereby avoid the many dangers that entanglement with them presents — dangers of untried and unsafe technology, predatory lending practices, subsidization of destabilizing military nuclear programs, erosion of the global nonproliferation regime, technology theft and its diversion to military uses, and strategic manipulation for political ends by those authoritarian regimes. It’s time, in short, for civil-nuclear partners all around the world to take advantage of what responsible suppliers can provide, both today and tomorrow.

Significantly, I do not view this as an exclusively American project, and I do not advocate merely for our own national advantage here.  It is time for responsible suppliers in the non-authoritarian world to work together better, and to explore opportunities collectively to provide solutions to future nuclear power generation needs.  I believe there is much scope for negotiating such cooperative approaches between us, built around the safest and most reliable technology available, and taking advantage of the synergies that cooperation can bring among trusted and responsible suppliers in countries blessed with rights-based systems of democratic governance and that both model and insist upon the highest standards of nonproliferation integrity, safety, and security.

We in the United States see the future of the civil nuclear sector as involving more and more such cooperation, and you will accordingly see us more and more active in promoting and facilitating it in various ways — such as by encouraging the development of consortia of trusted suppliers who can work together on key contracts, so that the United States’ superlative reactor technology and fuel supply services can be married up with top-notch reactor construction expertise and financing opportunities, in order to provide recipients with unbeatable “one-stop-shopping” opportunities to meet power generation needs around the world.  We look forward to working with all of you in these great endeavors.

Thank you.

U.S. Department of State

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