Washington CNN  — 

The Trump administration will limit sales of US civil nuclear technology to China out of concerns that it is being diverted for military and other unauthorized purposes.

“The United States cannot ignore the national security implications of China’s efforts to obtain nuclear technology outside of established processes of US-China civil nuclear cooperation,” Secretary of Energy Rick Perry said in a statement Thursday.

The decision is the result of a broad government policy review led by the National Security Council and is driven by Beijing’s efforts to obtain advanced technology, nuclear material and equipment from US companies.

“The administration concluded that a change in US civil nuclear cooperation with China is necessary to strike an appropriate balance between long-term risks to US national security and economic interests and the impact to the US nuclear industrial base,” an administration official told reporters Thursday.

Intellectual property theft

The review, which examined the economic and national security ramifications, was prompted by China’s efforts to gain US intellectual property, sometimes illicitly, in ways that undermine American businesses and the military, officials told reporters in a conference call.

The administration official said China is “actively pursuing our advanced nuclear technology for diversion to military use in its third-generation nuclear power submarine, in the development of a nuclear-powered aircraft carrier and in strategic dual use nuclear-powered platforms, such as small modular reactors and floating nuclear power plants deployable in the South China Sea.”

The move comes as the US is waging a trade war against China, with roughly half the products China sells to the US each year now facing tariffs. Beijing has retaliated with its own penalties on American products.

The new policy, which goes into effect immediately, sets guidelines for all existing, pending and future technology transfers to China, administration officials said. They flagged particular concern about technology that can power submarines, aircraft carriers and small modular reactors that could be used in floating power plants in South China Sea.

‘Presumption of denial’

The administration official said the US knows China is already using nuclear power on man-made islands it has created in the South China Sea.

“We know that they are developing platforms for use on these islands and for nuclear powered icebreakers, also floating nuclear power plants, which give the potential for rapid deployment to any platform that it could be tethered to,” the official said.

Another US official said there will be a “presumption of denial” for all new license applications related to the China General Nuclear Power Group. The state company is now under indictment for conspiring to steal US nuclear technology.

“For decades China has maintained a concerted, central government-run strategy to gain nuclear advantage,” the second US official said.

The officials said US nuclear exports to China amounted to $170 million in 2017. The administration “carefully weighed” the economic impact, the official said, but was acting because it “must first and foremost protect” national security.

“We understand the US industry may suffer in the short term,” the administration official said, adding that “we believe that in the long term this policy will benefit” the US and protect the American nuclear industry.

China, the officials said, has been using unfair policies to surpass US industry and without this step, US companies could be placed at “an even greater disadvantage.”