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China, the US, and Nuclear Energy Geopolitics in Southeast Asia

Nuclear reactor exports are becoming an increasingly important arena of strategic competition.

The mothballed Bataan Nuclear Power Plant in the Philippines as of 2011.

After launching its 15th Five-Year Plan (FYP) in March, the Chinese government has been publishing sectoral plans, including the 15th Five-Year Plan for Building a Beautiful China and the 15th Five-Year Plan for a New-type Energy System by the end of June. Apart from the domestic build-out of nuclear energy, both plans demonstrate China’s ambition to become a global leader in nuclear energy governance and reactor exports. 

Almost simultaneously, the United States, Japan, and South Korea announced a new Memorandum of Cooperation at the NATO Summit to accelerate the deployment of small modular reactors (SMRs) in third countries, beginning with the Indo-Pacific.

These parallel developments signal that nuclear reactor exports are becoming an increasingly important arena of strategic competition. Since the Trump administration took office, the United States has linked the deployment of nuclear reactors, both domestically and internationally, to national security. The “123 Agreement” for peaceful cooperation has been the key indicator of U.S. nuclear energy diplomacy. In recent years, new signatories to the 123 Agreements and countries expressing interest in them have concentrated in Southeast Asia – the same region where China is focusing its civil nuclear engagement. 

Southeast Asia’s Energy Security and Nuclear Energy Challenges

Energy security is a major vulnerability for Southeast Asia, as highlighted by the closure of the Strait of Hormuz, through which 60 percent of Southeast Asia’s crude oil passes. To cope with the disruptions, some Southeast Asian governments rolled out short-term measures to curb energy demand. However, any such efforts will be short-lived. 

Southeast Asia’s electricity demand is projected to grow by more than 100 TWh by 2030, driven by data centers, electric vehicles (EVs), and industrial needs. That will necessitate enhanced energy supply and security. With that in mind, some countries, including Indonesia, the Philippines and Vietnam have demonstrated a strong interest in nuclear energy by setting national targets to operate their first nuclear reactors before 2035. Some other countries, including Malaysia, Myanmar, Singapore, and Thailand, are actively considering nuclear energy as part of their energy mix. These interests focus specifically on SMRs.

Nuclear reactors are often viewed as having high upfront costs and long construction schedules. In the United States and Europe, new-built reactors have been rare in recent years, and the licensing process and loss of construction expertise have prolonged project timelines and further elevated costs. In contrast, most newly built reactors are built by Asian countries, mainly China and South Korea, which have proven their ability to build reactors on time and on budget.

For new nuclear energy countries, operating nuclear power plants means not only building reactors but also developing the entire infrastructure, including the regulatory framework, human resources, safety culture, and more. The process, according to the International Atomic Energy Agency (IAEA), takes around 10 to 15 years. As the life of a reactor has been extended to 60 to 80 years, and decommissioning takes another 10 to 25 years, importing a reactor from another country means 100 years of political, logistical, educational, and legal alignment.

Russia, China, and the United States are the major nuclear reactor exporters worldwide. Russia leads in the number of reactors exported with state-owned Rosatom. Its ability to cover the entire fuel cycle and its build-own-operate model are attractive to new nuclear energy countries. Still, sanctions following the Russian invasion of Ukraine have significantly affected its financing and logistical capabilities, resulting in construction delays. 

China also adopts a state-owned company approach, with China National Nuclear Corporation (CNNC) and China General Nuclear Power Group (CGN) as the main players. Although China was once set to build 30 reactors in Belt and Road Initiative (BRI) countries by 2030, it has so far built reactors only in Pakistan. Chinese companies don’t own or operate the reactors in Pakistan, but the fuel supply is dependent on China.

The private sector has driven U.S. nuclear energy exports, but the government supports potential importing countries through multiple programs. Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST) builds capacity for countries with a strong focus on nuclear security, safety, and nonproliferation. Both the SMR Financing Toolkit by Export-Import Bank of the United States (EXIM) and loans, guaranties, and investments by the International Development Finance Corporation (DFC) are meant to support the........

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