Nexperia dilemma shows need for EU to reconsider, engage with China

After China and the United States reached a joint arrangement in their Kuala Lumpur trade talks, the Dutch government now finds itself in a bind, having seized the Chinese company Nexperia's assets in the Netherlands following the US' "penetration rule". A rule that has now been suspended.

Nexperia China has flatly rejected the claim by its Dutch head office that its suspension of wafer supplies to Nexperia China's Dongguan plant was due to so-called contract violations by the Dongguan plant.

Nexperia's Dutch head office's claim was apparently made under pressure from the Dutch government. The incident underscores how politicizing economic issues leads to self-inflicted damage, not strategic security.

The Dutch government should correct its wrongdoing, restore normal operations and seek to repair the Netherlands' economic relations with China by taking concrete actions. The ball is clearly in the Dutch government's court.

The joint arrangement reached between Chinese and US trade negotiators demonstrates that trade differences can be managed.

In this context, the Dutch government's actions appear not only irresponsible but also needlessly harmful. Major automakers in Europe, the US and Japan are already struggling with chip shortages caused by this disruption. Without prompt correction, such rash decisions of the Dutch side risk deepening the woes of a wide range of industries worldwide.

This episode also reveals the European Union's lack of strategic autonomy in handling China-related issues. After the Sino-US joint arrangement was announced, EU trade chief Maros Sefcovic stated that the China-US joint arrangement on rare earth export controls reached at the Kuala Lumpur trade talks will also apply to the EU, again showing how Brussels has delegated its China policy to Washington. Instead of aligning itself with US pressure or forming new barriers, the EU should engage in dialogue with China in good faith to show its commitment to handling bilateral trade differences in a responsible and autonomous way.

China's rare earth export control measures that the EU is concerned about are lawful, measured and nondiscriminatory. They are not aimed at any specific country, including EU members. These measures align with international norms of nonproliferation and responsible resource management. As such, the EU should refrain from politicizing the issue and work with China to address mutual concerns through consultation.

Likewise, G7 economies must resist the temptation to form exclusionary "a critical minerals alliance" that will necessarily undermine global trade rules. Attempts to use small-circle rules to reshape global supply chains run counter to market economy principles and will only damage international confidence.

A Commerce Ministry spokesperson noted in reply to a question on Nexperia on Saturday, China welcomes companies facing practical difficulties to promptly contact the ministry or local authorities. The country will comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria. This demonstrates China's commitment to keeping supply chains stable, its willingness to shoulder its responsibilities as a major country and its readiness to help solve practical issues rather than escalate tensions.

The more complex the international environment becomes, the more China and the EU — as two major economies — should strengthen communication, enhance mutual trust and act as anchors of global stability and certainty.

China remains a firm supporter of European integration and calls on the EU to work with it to uphold multilateralism and free trade, safeguard international rules and order, promote the peaceful settlement of disputes and jointly tackle global challenges such as climate change.

This year marks the 50th anniversary of China-EU diplomatic relations. The EU should draw the right lessons from past cooperation and chart a forward-looking vision for the future. China is committed to high-quality development and high-standard opening-up, and stands ready to deepen economic and trade cooperation with the EU, expand two-way market access and properly handle differences through consultation to achieve mutual benefit and win-win outcomes.

For the EU, the responsible path lies in respecting contracts, depoliticizing economic issues and working with China to stabilize supply chains, and ensure the steady development of the world economy.