Dutch Prime Minister Mark Rutte has announced his meeting with Chinese President Xi Jinping in Beijing on Wednesday, to engage in high-stakes discussions, with economic issues taking center stage as new Dutch policies on chip exports to China threaten to strain bilateral ties.
Rutte’s last encounter with Xi occurred in November 2022 during a Group of 20 summit in Bali, where the Chinese President emphasized the importance of depoliticizing economic matters and preserving stability in industrial supply chains.
The focal point of this year’s discussions revolves around the Dutch government’s decision to withhold licenses for ASML, a leading provider of lithography equipment to global chip manufacturers, from exporting advanced “DUV” tool lines to China.
Despite this stance, the Netherlands faces pressure to safeguard its economic interests, particularly those of ASML, whose second-largest market is China.
The talks are expected to delve into whether ASML will receive Dutch government licenses to continue servicing the billions of euros worth of advanced equipment already sold to Chinese customers, now subject to export restrictions.
Although the export restrictions have had minimal immediate financial repercussions for ASML, the company’s long-term prospects could be affected if the Netherlands is perceived as an unreliable business partner.
Chinese chipmakers may explore alternatives from competitors like Nikon and Canon.
Dutch Trade Minister Geoffrey van Leeuwen, accompanying Rutte in Beijing, emphasized that defending ASML’s interests is a top priority.
However, navigating this delicate diplomatic balance is challenging, particularly amid the ongoing “chip war” between the United States and China, where ASML finds itself in the spotlight.
ASML’s dissatisfaction with Dutch government support has been palpable, with the CEO issuing warnings about relocating operations if growth plans cannot be realized.
Despite ASML’s assertion of compliance with export regulations, the company declined to provide comment on the matter.
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