By Jim Trippon, editor-in-chief of China Stock Digest.

The shock waves from Japan’s catastrophic earthquake have gone global. But Asian stock markets have proven relatively resilient in the aftermath.

Where is this Asian investor optimism coming from?
Chinese firms are already looking forward to a role in rebuilding Japan. That’s why steel stocks are on the rise in Shanghai.

Coal is essential to steel-making and China’s coal companies also followed suit. Coal shares are also getting a boost on suspicions that nuclear reactor construction plans will be delayed, creating a bigger future market for coal-burning power plants.

The Chinese government maintained that it would not be swayed from its ambitious reactor-construction plans, though it did order a comprehensive safety review. Nuclear-industry shares―discounted last week―are likely to rebound if Beijing is able to convince investors that it will push ahead with its aggressive construction plans.

China’s energy planners say they aim to have 40 new reactors on stream by 2015. By 2030, China plans to build enough nuclear reactors to generate more power than all 104 reactors now operating in the US.

How credible is that goal? It is true that many parts of China are prone to earthquakes. But the crisis-stricken Japanese reactors are as much as 40 years old. They lack many of the safety features being built into current “third-generation” reactors.

The fault in the Japanese reactors lies in the electric pumps which have failed to provide cooling water to reactor cores. Third-generation reactors require no pumps because they rely on the natural convection currents generated by heated water to move coolant through the core. It is a much simpler and safer system.

Fukushima Is No Chernobyl
It’s also important to quell the panic on a number of other fronts. The horrifying specter of Chernobyl is frequently raised by the media as a possible outcome in Japan. This is a false and dangerous myth.

Chernobyl had no containment building. But the Japanese reactors have concrete shells around their radioactive cores that have helped limit dangerous emissions.

Chernobyl used graphite, rather than water, in its core. Graphite can catch fire―and that’s exactly what happened when the Soviet-built core got too hot. The seawater being pumped into the crippled Japanese reactors is obviously not flammable.

This is not to diminish the seriousness of Japan’s crisis. Our sympathies go out to all of the Japanese people in their time of pain and loss.

But when it comes to China, the future of nuclear power seems unshaken. China has set a goal of converting a high percentage of future energy production to alternate sources.

Beijing has shown again and again that it pursues its goals with determination, and doesn’t change course easily.

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