Will China become nuclear power leader?

China wants to become a key builder of nuclear power facilities, but it has faced political concerns and safety issues in recent months.

So says Kenrick Leung, director of investment for Greater China Equities at Amundi in Hong Kong, and manager of the Renaissance China Plus Fund. He explains that China’s partnership with French-owned EDF Energy to develop a nuclear power station in the U.K. (Hinkley Point C) has already dealt with an early snag.

At the end of July, Britain’s Theresa May government called for a review of that project, says Leung. The 18-billion-pound project has since been approved by the U.K., but Leung says the challenge leading up to that approval was political. He finds the British were uneasy with China building and owning domestic infrastructure, and that led to questions about national security, especially in the wake of the “the post-Brexit backlash on globalization and immigration.”

As Bloomberg reports, the Hinkley Point C project will “proceed under the condition that EDF–which has a Chinese partner in the project–won’t be able to sell down its controlling stake prior to completion of construction without government approval.” There were also concerns about the “guaranteed electricity price that underpins the development” of the nuclear power station.

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If the British government had decided to put this project on ice, it would have been a definite setback for China, Leung says, given that the Hinkley project marks China’s first real step toward exporting to developed nations.

China is only a financial investor—with a 33% stake in the Hinkley project—but the initial agreement called for China’s Hualong One nuclear technology to be considered for subsequent projects.

Looking out over the long term, says Leung, “such projects are very consistent with what China wants to do. China wants to move up the value curve as an exporter of value-added products, rather than [be] a low-end consumer goods.”

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China is also building a power plant in Pakistan with the Hualong One technology, but Leung says the one in Britain is more high-profile. “If you can build a project in U.K. under their stringent standards, it lends a lot more legitimacy.”

Technology is the other challenge working against China’s nuclear ambitions. According to Leung, China’s technology prowess is still being questioned. “This is not really a proven technology. So there are safety concerns after what happened in Fukushima, Japan,” Leung says.

As a result, there are a lot of growing pains, he adds. “We need to overcome [this] stigma. Ultimately we’ll get there but it’s a multi-year process.”

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