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(Bloomberg Markets) — Within sight of mango and pineapple fields on the Chinese holiday island of Hainan, workers at Linglong One are finishing what will become the world’s first small modular nuclear reactor built for commercial purposes. It’s part of a national fleet of atom-­splitting plants that aim to wean the country off coal and imported fuel.

“There are probably not more than seven countries that have the capability to design, manufacture and operate nuclear power plants,” Cui Jianchun, the Chinese foreign ministry’s envoy in nearby Hong Kong, said during an official visit to the plant. “We used to be a follower, but now China is a leader.”

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The scale and speed of Beijing’s crusade is hard to overstate. China approved its first nuclear power station in 1981. BloombergNEF now expects the country to leapfrog France and the US by 2030. In an age when few new reactors are built at all, China has 30 under construction. Beijing has spent billions on research and experiments such as Linglong One, operated by China National Nuclear Power Co. and the only small modular reactor approved by the International Atomic Energy Agency to date. It’s due to be completed by the end of next year. On key hoped-for advances like fusion—combining rather than breaking apart atoms—Beijing far outspends the US on research and development.

There’s no great industrial secret to what China is doing. It’s largely a matter of vast scale, state support and relatively simple, replicable construction. It’s a success that could also be transferred abroad, because the appetite for nuclear power is growing thanks to energy security and climate imperatives. That’s especially true in the developing world. Along with Russia and South Korea, China is one of only a small handful of nations supplying the technology as US and French stalwarts are weakened, raising both diplomatic and, in some quarters, safety concerns. Beijing hasn’t reported a major disaster, but industrial accidents in other sectors and a culture of secrecy have rattled skeptics.

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“China’s pace is something that’s truly been unseen anywhere ever before,” says Francois Morin, China director for the World Nuclear Association.

The roots of China’s new standing date back to the last decade and the safety failures that led to a meltdown at the Fukushima Dai-Ichi reactor, operated in Japan by Tokyo Electric Power Co., following a massive tsunami. As expansions were halted around the world, Beijing did pause approvals for new plants—but it ended that hiatus in 2019. Since then the government has approved 10 reactors in each of the past two years, to reach its goal of bringing nuclear to 15% of total generation by 2050, enough to make it the third-­largest source of energy, after wind and solar.

The US still has the largest fleet, but it’s built only three reactors in the past decade, including two at one plant in Georgia. “China is the only country that never stopped construction in the past decade,” says Lin Boqiang, dean of the China Institute for Studies in Energy Policy at Xiamen University. “Stopping new construction elsewhere either left a vacuum in ­experience—or an industry in bankruptcy.”

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China has lavished government support on the industry—specifically, inexpensive financing from state-owned banks. That’s crucial. Most of the lifetime cost of running a nuclear facility is paying down the construction debt, according to Morin. For example, at 2% interest, about the minimum for infrastructure projects in places like China, nuclear power costs about $47 per megawatt-hour, far cheaper than coal and natural gas in many places. At a 10% rate, the high end of the spectrum, the cost of nuclear power shoots up to almost $100 per MWh, more expensive than just about everything else.

China also prioritizes building several reactors of the same design, creating standardization, a ready supply chain and an army of trained workers. That avoids cost overruns and delays like the ones that plagued the Georgia plant. “The key lies in the scale of the industry and the recent trend to focus on a small number of reactor types,” says Philip Andrews-Speed, senior research fellow at the Oxford Institute of Energy Studies. “It is difficult and expensive to supply and construct a reactor if the design is new and the construction program is small.”

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Today, China is focused on the Hualong One, a so-called third-generation reactor design with enhanced safety systems to prevent meltdowns even if all control of the plant is lost. Almost half the reactors under construction or in planning come under this umbrella—including at the Changjiang facility in Hainan that’s also home to Linglong One. China has localized supply to shelter the industry from geopolitical travails.

The technology is far from revolutionary, but Beijing is no longer simply copying. Last year it started commercial operations at Shidaowan One, the world’s first high-temperature gas-cooled reactor, a so-called fourth-generation technology. It heats up helium instead of water to produce power, an important consideration for plants farther from the coast. According to Stephen Ezell, vice president for global innovation policy at the Washington, DC-based Information Technology & Innovation Foundation, China likely stands 10 to 15 years ahead of the US in its ability to deploy fourth-generation nuclear reactors at scale.

In January, China also unveiled a national company designed to speed development of nuclear fusion, officially joining the race to develop nearly limitless carbon-free energy with no danger of a meltdown because it doesn’t involve a chain reaction that can get out of control. The country’s share of all nuclear patents increased from 1.3% to 13.4% from 2008 to 2023; in nuclear fusion patent applications, however, it leads. The technology remains hugely challenging, with delays and cost overruns hampering the world’s biggest fusion-energy experiment in France—an international effort of which China is a part.

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China will have to grapple with the question of safety. The country spent billions on checks after Fukushima, but a 2021 suspected leak at the Taishan plant, a joint venture between Électricité de France SA and China General Nuclear Power Corp. (CGN) about 200 kilometers (124 miles) from Hong Kong, was unnerving. China denied a leak, and it was ultimately classified as a zero-level incident without radiological exposure risk.

Then there’s the issue of location. So far all of China’s reactors have been built near its coastal megacities, which are hungry for energy and far from the country’s coal and hydropower resources. But to meet capacity goals, Beijing will have to start building plants inland, a move it’s so far resisted, out of concern about river pollution and increasingly frequent droughts that could shut down water-dependent plants—as has happened in Europe in recent years. “Developing inland projects would be the last resort,” says Xiamen’s Lin, who says inland development is “inevitable” if China bets on nuclear.

Of course, Beijing has a long history of using energy deals—including nuclear—to strengthen international ties. In 2019 the former chairman of China National Nuclear Corp. said the country could build 30 overseas reactors that could earn Chinese companies $145 billion by 2030 through its “Belt and Road” initiative.

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So far, reality has fallen short of that ambition, outside of some successes in Pakistan. The highest-profile flop occurred in the UK, where CGN spent years getting the Hualong One a generic design approval and investing in French-designed reactors at Hinkley Point and Sizewell. The cooperation has unraveled as geopolitical tensions worsened. “Though China has kept a rather decent safety record so far, it is not sufficient to win either public support or confidence among key decision-makers around an overly ambitious nuclear power expansion,” says Kevin Tu, a nonresident fellow at Columbia University’s Center on Global Energy Policy. “Political trust is the prerequisite for international collaboration on nuclear power technology.”

China hasn’t signed on to any of several international treaties that set standards for sharing liability in the event of accidents. It also hasn’t offered to take back spent fuel. But even if Western countries are reluctant to import China’s nuclear technology, they could still help their own energy transition by adopting its development model. A massive pipeline of projects shows it’s possible to make large strides toward clean, around-the-clock energy using existing nuclear technology—if accompanied by generous financial terms, consistent state support and rigorous safety standards.

The envoy Cui, walking around the southern Chinese facility in July with foreign dignitaries and businessmen, is adamant that China’s model works and could pave the way for a nuclear revival. “A new spring has come,” said Cui, who was a nuclear industry veteran before becoming a diplomat. “Now people realize more and more that it’s not possible to go without nuclear power.”

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