Tech war: Xi Jinping, Li Qiang to meet visiting Dutch PM Mark Rutte as chip tensions surge

China’s foreign ministry confirms visits to Beijing by Dutch leader and trade minister on Tuesday and Wednesday
Mark Rutte’s trip comes as the Netherlands and its chip tool giant ASML face US pressure to curb exports to China

China-EU relations

Meredith Chen

Published: 8:26pm, 25 Mar 2024

Why you can trust SCMP

Dutch Prime Minister Mark Rutte will visit Beijing on Tuesday and Wednesday, and meet Chinese President Xi Jinping, as the Netherlands’ chip export policy strains ties between the two countries.

The visit, which was confirmed by China’s foreign ministry on Monday, was aimed at discussing “bilateral and economic relations, the war in Ukraine and the situation in the Middle East”, according to a statement released by the Dutch government on Friday.

Rutte, together with acting trade minister Geoffrey van Leeuwen, will meet Xi and Chinese Prime Minister Li Qiang on Wednesday afternoon, the statement said.

US said to weigh sanctions against Huawei’s secretive chip supply network

With the Netherlands caught in the crossfire of China-US trade tensions, the visit is expected to centre on the licensing policy of Netherlands-based ASML, the world’s biggest developer of advanced semiconductor equipment for chip makers.

The company dominates the world market for the lithography systems manufacturers need to help build advanced integrated circuits.

The state-of-the-art equipment has become a major battleground in the US tech curbs on China.

The US government has pressed allies, including the Netherlands, Germany, South Korea and Japan to tighten restrictions on China’s access to semiconductor technology.

ASML previously announced that starting from January 1, it no longer expected to be able to obtain licences from the Dutch government to ship advanced deep-ultra violet lithography tool lines to Chinese customers.

Fears that the company’s chip-making equipment would be used by the Chinese military underlined recent decisions to deny the company the export licences, van Leeuwen told his country’s parliament in February.

03:36

China restricts critical metal exports following Western semiconductor curbs in latest trade war

However, the extent to which ASML would be able to continue to service the equipment it had already sold to Chinese customers – valued at more than €6 billion (US$6.5 billion) last year alone – remained uncertain.

The Netherlands is China’s second-largest trading partner in the European Union after Germany, according to the European Commission.

In 2023, the Netherlands was the largest importer of goods from China, and the third largest exporter of goods to China, after Germany and France.

In a call with his Dutch counterpart last May, the Chinese premier hailed the Netherlands as a “priority partner” within the EU, and called for the join maintenance of global supply chains.

Earlier this month, the Netherlands closed its consulate in the southwestern megacity of Chongqing without citing a direct reason. The move came as foreign investors continue to withdraw from China.

US says Chinese firm SMIC’s Huawei chip ‘potentially’ broke American law

Rutte and van Leeuwen will begin their diplomatic visit on Tuesday with a dinner hosted by representatives of the Dutch business community, during which they will discuss the trade and investment climate in China, the Dutch statement said.

Van Leeuwen will also meet Chinese Trade Minister Wang Wentao on Wednesday morning to “discuss economic cooperation opportunities, the importance of a level playing field, and the importance of equal market access”, the statement said.

Xi and Rutte last met in Bali in November 2022 and marked the 50th anniversary of the establishment of diplomatic relations between China and the Netherlands.

During that meeting Xi said attempts to politicise economic and trade issues must be rejected, and stability of global industrial and supply chains should be maintained.