The modular high-temperature gas-cooled reactor (MHTGR) has distinct advantages in terms of inherent safety, economics potential, high efficiency, potential usage for hydrogen production, etc. The Chinese design of the MHTGR, named as high-temperature gas-cooled reactor-pebble bed module (HTR-PM), based on the technology and experience of the HTR-10, is currently in the conceptual phase. The HTR-PM demonstration plant is planned to be finished by 2012. The main philosophy of the HTR-PM project can be pinned down as: (1) safety, (2) standardization, (3) economy, and (4) proven technology. The work in the categories of marketing, organization, project and technology is done in predefined order. The biggest challenge for the HTR-PM is to ensure its economical viability while maintaining its inherent safety. A design of a 450 MWth annular pebble bed core connected with steam turbine is aimed for and presented in this paper. (c) 2006 Elsevier B.V. All rights reserved.