China protests over Dutch plan to chop chip entry, as Netherlands strikes to affix US curbs on Chinese language hi-tech

The Dutch announcement on Wednesday got here simply over a month after a reported settlement with Washington to restrict Chinese language entry to semiconductors, following months of US lobbying.

The Chinese language international ministry mentioned it had lodged representations with the Dutch authorities.

“We categorical our agency opposition to the Dutch aspect for utilizing administrative intervention to limit the conventional financial and commerce exchanges between Chinese language and Dutch firms,” international ministry spokeswoman Mao Ning mentioned in Beijing on Thursday.

“We hope that the Netherlands will uphold an goal and truthful place and market rules … not comply with particular person international locations in abusing export management measures, and work with China to keep up the steadiness of the worldwide industrial chain and provide chain,” she added.

In an obvious reference to the US, Mao additionally slammed “some particular person international locations” for “politicising” financial and tech points and “threatening” allies to impose export restrictions towards China within the identify of “nationwide safety”.

The Dutch proposal, introduced by commerce minister Liesje Schreinemacher in a letter to parliament on Wednesday, didn’t point out China or the particular Dutch firms concerned.

Nevertheless, it mentioned the transfer would have an effect on “DUV” lithography techniques, one of the vital superior machines offered by ASML, the biggest semiconductor provider within the Netherlands.

In an announcement, ASML mentioned the brand new restrictions would require the corporate to use for export licences with a view to ship its “most superior” immersion DUV techniques.

It might “take time” for the brand new export management guidelines to translate into laws and be in impact, ASML added.

The Dutch firm beforehand warned that semiconductor restrictions towards China would injury the worldwide provide chain.

China accounted for round 15 per cent of ASML’s gross sales in 2022. The corporate has offered greater than €8 billion (US$8.44 billion) value of DUV machines to clients in China since 2014, in keeping with Reuters.

ASML and Japan’s Tokyo Electron are each main exporters of chip equipment to China.

China accounted for a 3rd of abroad gross sales of such Japanese-made gear final yr, Nikkei Asia reported, citing information from the nation’s Semiconductor Gear Affiliation.

The US has spent months attempting to push main suppliers the Netherlands and Japan to affix its efforts to carry again China’s semiconductor trade. Washington has already banned US firms from promoting superior chips or establishing factories in China since final yr, as strategic competitors with Beijing intensifies.

Plans are additionally within the works to focus on different key sectors, equivalent to 5G and synthetic intelligence. Washington stopped issuing export licences for US firms to promote to Huawei in January, transferring in the direction of a complete ban on doing enterprise with the Chinese language tech large.

Noah Barkin, managing editor at Rhodium Group’s China apply, mentioned the Dutch transfer to comply with the US was “an indication of issues to come back”.

“Over the approaching years, the US might be pushing its allies to get on board with a bunch of different restrictions on commerce and funding with China,” he mentioned.

Wang Yiwei, a professor of European affairs at Beijing’s Renmin College, mentioned China had been taking steps to spice up technological self-reliance in response to the US curbs.

Nevertheless, it might be cautious about taking any reciprocal measure as that may additional undermine its pursuits.

“China is now in a dilemma. It’s [the US and its allies] which can be violating market rules and decoupling from [China]. In case you do the identical and retaliate towards them, the injury might be doubled,” he mentioned.

“General it should have an ideal influence on the trade within the quick time period, that’s why we at the moment are restructuring the Ministry of Science and Expertise and taking note of fundamental schooling in [science and technology].”

China can be contemplating export controls on photo voltaic panel expertise, a sector it dominates, along with its push for technological independence, to hedge towards the “containment” measures from the US and its allies.

President Xi Jinping earlier this week straight accused the US of main the West to suppress China’s growth, repeating his name for self-reliance as high lawmakers and coverage advisers gathered for the “two classes” – the nation’s annual parliamentary conferences.

A significant reshuffle of Chinese language state establishments tabled on the nationwide legislature this week included a key transfer to restructure the science and expertise ministry and arrange a central committee to supervise its work.