Tensions between the Netherlands and China continue to rise following the Ministry of Economic Affairs’ decision to intervene at chipmaker Nexperia. The Chinese government calls the move discriminatory. The country warns that the Netherlands should not underestimate China’s determination.
This is reported by De Telegraaf and the FD. The Dutch cabinet took partial control of Nexperia out of concern for national and European economic security. According to insiders, there are signs of mismanagement and conflicts of interest by Zhang Xuezheng, the Chinese CEO of Wingtech Technology, the parent company. This could jeopardize the supply of essential chips.
In early October, the Enterprise Chamber suspended Zhang after European directors of Nexperia reported serious administrative shortcomings. Outgoing Minister Vincent Karremans then used the Goods Availability Act to temporarily influence decisions within the company. This is the first time this law has been applied.
Export ban in response
China responded almost immediately by imposing an export ban on Nexperia. Letters to customers show that the measure has been in force since October 4 and applies to products from the factory in the southern province of Guangdong. The Chinese authorities classify the chips as so-called dual-use products, which can be used for both civilian and military purposes.
The export ban is causing great concern among European customers, especially in the automotive and electronics sectors. According to the German distributor Components at Service, there are no immediate alternatives available for some parts, which could cause production processes to come to a standstill or be delayed for a long time.
The Chinese government claims that the Netherlands is stretching the concept of national security to exclude Chinese companies. According to the Ministry of Foreign Affairs in Beijing, this is a form of economic discrimination and politicization of trade issues. The China Semiconductor Industry Association also expressed criticism, calling out the abuse of security arguments that, according to the organization, threaten the stability of global supply chains.
Tensions are being stoked
Chinese state media is singing the same tune. The Global Times newspaper emphasized that the Netherlands should not underestimate China’s strength and perseverance. Analysts see the export ban as a countermeasure that will further fuel tensions.
Nexperia, once part of NXP and owned by Wingtech since 2019, is one of the largest producers of standard chips for cars, white goods, and consumer electronics. The company is trying to lift the export restrictions in consultation with the Chinese authorities.