China urges Netherlands to continue cooperation ahead of Dutch curbs on hi-tech exports

In a phone call on Wednesday with Hanke Bruins Slot, who became the new Dutch Foreign Minister in September, her Chinese counterpart Wang Yi said Beijing was ready to give full play to the “open, pragmatic and comprehensive” partnership between the two countries.

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“We hope the Netherland can adhere to the spirit of independence, freedom and openness, follow international trade rules and uphold the spirit of contract, and join forces with China to promote bilateral cooperation on the economy and trade, science and technology, innovation and other fields, and maintain the stability of the global industrial chain and supply chain,” Wang said, according to China’s Ministry of Foreign Affairs.

The United States has been working to curb China’s ability to source technology that could be used to bolster its military capabilities and is reportedly pressuring allies to follow suit.

The Dutch government has followed Japan, another chip-making heavyweight, in slapping restrictions on exports to China. These restrictions legally took effect on September 1, with a “grace period” until January 1.

China has worked for years to develop its own lithography systems, but its best home-made machine still lags far behind the Dutch multinational ASML and Japan’s Nikon, according to industry insiders.

Chinese companies are using the grace period to fill their inventories. In September, Chinese imports of lithography machines from the Netherlands rose by 1,850 per cent to US$1.3 billion compared with a year earlier, calculations based on China’s customs data showed. In August the increase was 343 per cent, and in July it stood 1,677 per cent.

Chinese customs data released on Tuesday also showed that despite a broad-based decline in trade between the European Union and China, Dutch shipments of goods rose by 29.5 per cent last month, compared with a year earlier.

Analysts predict detailed data released later this month will show another huge splurge on advanced photolithography machines.

Slot said that trade relations between the two countries are strong, and China is the Netherlands’ most important trading partner in Asia, according to China’s foreign ministry.

The statement went on that she welcomed the gradual resumption of bilateral exchanges at all levels after the Covid-19 pandemic, and said the country is willing to work with China to strengthen mutually beneficial cooperation and push forward the open and pragmatic comprehensive cooperative partnership.

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Wang also urged the Netherlands to play a “constructive” role in promoting the “sustained, sound and steady” development of relations between China and the European Union.

“There is no conflict of fundamental interests between China and the EU, and consensus far outweighs differences,” he added.

The two ministers also exchanged views on “international and regional issues”, the MFA post reads, without elaborating.

Pang Zhongying, a professor of international affairs at Sichuan University, said: “China should work harder to strengthen its relations with European countries, because it matters significantly to its economic and technological development given China’s geopolitical tensions with the US.”