China has 13 nuclear reactors, 25 under construction, and many more planned, said Westinghouse spokesman Vaughn Gilbert. China will spend an estimated $120 billion during the next nine years, a sum expected to more than double by 2030.

The Cranberry-based company says it's confident that in China, it has found a partnership that will flourish. Some experts are not so sure.

The problem is one that is endemic in China for Western multinationals: The cost of tapping into the world's largest market is surrendering technology that took generations and billions of dollars to accumulate.

"The Chinese are quite insistent that they be allowed to acquire technologies from companies participating in the Chinese market," said Fletcher Newton, executive vice president for strategic affairs for Uranium One, a Russian-controlled mining company with interests in Kazakhstan, Australia and the United States that hopes to benefit from selling uranium for the Chinese reactors.

"For something like nuclear reactor construction, I think they are already putting licensing agreements in place with the different reactor vendors so that they can build more reactors themselves," he said.

Thomas Hout, visiting professor of business at the University of Hong Kong and co-author of a recent report in the Harvard Business Review about the perils of doing business in China, concurs. Companies often get fooled by how fast the Chinese learn and then improve upon foreign technology, he said.

Hout pointed to Japan's Kawasaki Heavy Industries working with China in 2004 to develop high-speed bullet trains. Within four years, he noted, China made its own.

When Westinghouse's French rival Areva negotiated an $11.9 billion deal with China, Hout said the matter was held up at the last minute as French President Nicolas Sarkozy visited Beijing for the signing ceremony. The Chinese "pleaded that the French share their (nuclear) recycling technology. Areva said no. The Chinese gave in. Areva wasn't willing to give as much as Westinghouse."

'I would worry'

Another person who expressed skepticism about the Westinghouse deal is Pankaj Ghemawat, the Anselmo Rubirlta professor of global strategy at the IESE Business School in Spain. In an e-mail interview, he said that Alcatel, the French communications company, "had a strategy of transferring technology of their older telecom switches to China that was bolstered by their confidence that they could stay ahead by coming up with newer designs. They seem to have been surprised by how quickly (Chinese companies) Huawei and ZTE have caught up."

He said of Westinghouse: "I would worry."

Westinghouse rolled the dice in 2007 when it signed a deal to build four of its next-generation AP1000 nuclear reactors in China. It did not disclose specific terms, but the World Nuclear Association said in a March report that "the figure of $5.3 billion for the first two (reactors) was widely quoted."

It appears 125-year-old Westinghouse, now majority-owned by Japan's Toshiba Corporation, is tapping into an exploding and tremendously lucrative market. China is determined to free itself from fossil-fuel dependence as much and as quickly as possible.

Experts say the Chinese find Westinghouse's AP1000 design particularly interesting because, unlike Japan's stricken reactors at the Fukushima Daiichi plant, it uses a passive cooling backup system that does not rely on electrical generators to cool the reactor in an emergency.

"The Westinghouse AP1000 is the main basis of technology development in the immediate future," the association says.

Technology transfer

Three companies went head-to-head in bidding for China's four-reactor deal: Westinghouse, the French multinational Areva and Russia's Atomstroyexport. The Chinese judged the bids by the "level of technology, the degree to which it was proven, price, local content and technology transfer -- which apparently became the major factor," according to the association.

In the end, Westinghouse agreed to give up more technology and won the contract. The Chinese Internet site VisitCHN reported in November that the company delivered "the initial" 75,000 technical documents to China.

Westinghouse's Gilbert confirmed the company transferred a significant degree of technology to the Chinese -- including technical details of a passive backup cooling system -- but believes it is part of a long-term business relationship.

Gilbert said China declared that 50 reactors using the AP1000 design will be under construction or in operation by 2030. He said Westinghouse and its suppliers would be responsible for 50 percent of the design, engineering and construction of the first four reactors and likely would provide a lesser amount for at least 10 others, though the two sides haven't signed final agreements on those. He agreed that there are "no guarantees" but insisted that getting in first "gives us a leg up in China."

And Westinghouse is not standing still. The company will continue to innovate while the first reactors go up, Gilbert said.

Westinghouse 'happy'

Westinghouse, which has 6,000 employees in Western Pennsylvania, anticipates it will continue to participate in the AP1000 program in China beyond the first four reactors.

Gilbert said that China promised not to use Westinghouse-based technology outside of China.

"We are quite happy with our deal," he said.

He pointed to the deal Westinghouse made to share its technology with South Korea decades ago. He said the company continues to profit from that association.

On March 14, South Korean President Lee Myung-bak broke ground on a four-reactor complex in the United Arab Emirates. The UAE is paying a Korean-led consortium $20 billion for the complex. The consortium will receive an additional $20 billion to operate the reactors for 60 years.

The consortium, headed by the Korea Electric Power Corporation, includes several major Korean firms, such as Samsung C&T and Hyundai Construction. The group includes Westinghouse, whose share would be approximately $1 billion.

South Korea's Ministry of Knowledge Economy said in 2009 that it hoped Korean companies would build 400 plants around the world by 2030, producing roughly $1 trillion in revenue and making Korea a nuclear-exporting powerhouse.

Nuclear watch groups question the national security implications of the Westinghouse operation in China, though it met with U.S. regulatory approval. The Nonproliferation Policy Education Center, a Virginia-based nonprofit that studies nuclear issues, warns that "China could try to adapt the reactor coolant pumps in the AP1000 to its nuclear submarine program to make its submarines quieter."

Westinghouse expressed confusion about that complaint.

"Our pumps are not designed to be quiet," Gilbert said.