Dutch govt as the one who tied the bell is one who should untie it: China Daily editorial

Government officials of China and the Netherlands held two rounds of consultations in Beijing regarding semiconductor manufacturer Nexperia on Tuesday and Wednesday, during which the Dutch side offered to suspend the administrative order issued under the country's "Goods Availability Act".

China welcomes the Dutch move regarding the overseas subsidiary of the Chinese company Wingtech. However, the proposed suspension falls short of revoking the administrative order, a move that would address the root cause of the turbulence and chaos in the global semiconductor supply chains.

On Sept 30, the Dutch government cited "national security concerns" as the justification for freezing Wingtech's control over Nexperia for a year. A move that created a chip shortage that sent shock waves through the global automotive sector.

The Dutch decision to suspend its intervention in Nexperia is a pragmatic recognition of the unforeseen consequences and harmful effects of its unwarranted move. The erroneous ruling, pushed by the Dutch Ministry of Economic Affairs, to strip Wingtech of its control over Nexperia, is the key obstacle to resolving the issue.

Thus the suspension is "a first step in the right direction toward a proper settlement of the issue", as a spokesperson for the Chinese Commerce Ministry said. The incident shows that overstretching "national security" is not a panacea for economic woes and that decoupling in the technology chain is not viable, as the spillover effects are extremely damaging.

In a statement released on Wednesday, Dutch Minister of Economic Affairs Vincent Karremans said that "in the past few days we have had constructive meetings with the Chinese authorities", a clear indication of the diplomatic efforts being made to resolve the issue. If that heralds the Dutch government reverting control of Nexperia to the Chinese company, this will be a return to rational decision-making that will restore stability in the global supply chains.

In the latest talks, both sides agreed to eliminate administrative intervention and support enterprises in resolving internal disputes through consultation in accordance with the law, which will not only protect investors' legitimate rights but also create better conditions for restoring security and stability of the global semiconductor industry, according to the Commerce Ministry spokesperson.

The European Commission should take note of this. Instead of mulling an "economic NATO", as European Union High Representative for Foreign Affairs and Security Policy Kaja Kallas proposed recently — a "sort of economic Article 5 alliance" in which European countries take concerted actions to what she implied are economic threats to the bloc — it should reflect on its exaggeration of the "risks" of trade with China.

It is hoped that European governments and companies will collectively recognize that the perception of China as a "threat" is an ideologically created construct of some EU officials who cannot wean themselves from the US security teat.

Public opinion in Europe largely favors a resolution to the crisis, recognizing that the Dutch takeover of the company "risks producing just the result the government says it wants to prevent", as Herman Quarles van Ufford, a senior fellow at the European Council on Foreign Relations, warned.

The Chinese side hopes that the Dutch side will continue to demonstrate its commitment to working with China and truly propose constructive solutions to the problem.

The European Union should also learn the right lesson from the crisis — politicizing trade issues is not the right approach to protect its interests.