A logo of Nexperia Photo: VCG

On the afternoon of November 4, a spokesperson for China's Ministry of Commerce commented on recent issues related to Nexperia Semiconductor. The spokesperson stated that the Dutch government had improperly interfered in the internal corporate affairs of Nexperia, while the Dutch Enterprise Court had issued an erroneous ruling depriving the Chinese enterprise of its equity, seriously infringing on the legitimate rights and interests of the Chinese enterprise. Despite repeated reasonable requests raised by China during consultations, the Dutch government persisted in its course, ultimately causing turbulence and disruption in the global semiconductor production and supply chain. In this regard, the Dutch side should bear full responsibility. 

The Nexperia incident has come to this point, far exceeding the scope of a single company and a single dispute. It has instead become a barometer for global investors to gauge Europe's institutional credibility. The Dutch government has successively placed Nexperia under de facto control, bypassed the rights of Chinese shareholders in corporate governance, and unilaterally halted wafer supplies to Nexperia China. While claiming "national security" as its justification, the move is in reality an improper intervention in the company's internal affairs. It severely undermines the legitimate rights and interests of Chinese enterprises, and has also put a "question mark" on Europe's market economy system among global capital. Frankly, this was a "robbery" that took place in front of the whole world.

Business environments and institutional credibility are hard-won assets, accumulated over time as precious scarce resources. The Dutch government's actions have almost destroyed the protection of property rights - the very bedrock of the Dutch and European market economy system. Not only does it show a complete lack of contractual integrity, but it also raises doubts about its motives.

According to classical economics, when public power arbitrarily rewrites equity structures and corporate governance rules, market players have no choice but to include a higher "institutional risk premium" in their decisions. Uncertainty surrounding property rights will notably raise both transaction costs and risk premiums, deterring long-term capital. 

Should the belief that "companies may be seized at will" become established, Chinese investors will rethink their presence in the Netherlands and Europe, and businesses worldwide will also ask: "If it's Nexperia today, who's next tomorrow?"

The global production and supply chain constitutes a highly intricate, interdependent network where a single disruption can paralyze the entire chain. Nexperia Netherlands' abrupt cessation of wafer supplies to Nexperia China has amplified systemic risks throughout the chain. Such single-point failures, propagating through order delays, cost escalations, and supply substitution difficulties, will cascade into multiple sectors including automotive electronics and industrial control systems. 

In an industrial system with a highly integrated transnational division of labor, whoever takes the initiative to create uncertainty is essentially planting a mine for the "systemic failure" of global supply chains. In the end, no party will be able to remain unscathed. For Europe's manufacturing sector, which relies heavily on automotive electronics and power semiconductors, such self-inflicted harm will inevitably cause severe economic damage upon itself.

In the past, the US has repeatedly labeled and portrayed companies with Chinese investment backgrounds as risky, pressuring its allies to interfere in normal business activities under the pretext of "national security." This tactic has been played out multiple times in areas such as high-end lithography machines and advanced semiconductor manufacturing equipment. Through the recent meeting between Chinese and US leaders in Busan, a new round of high-level economic and trade communications, and interactions at multilateral events, the US has come to realize that such rigid unilateral control measures are unsustainable in the long run and will ultimately harm the interests of American companies and the stability of global production and supply chains.

After progress was made in China-US economic and trade consultations, the Netherlands found itself in an unprecedentedly awkward position in the Nexperia incident. The Netherlands' earlier extreme actions brought no tangible security gains, while in practice leading to a loss of trust from Chinese enterprises and the global market.

The Netherlands, having just taken the lead in forming Europe's "Semicon Coalition," immediately turned around and used illegal means to brazenly seize the physical assets of a Chinese company and undermine global industrial stability — the motives and intentions behind this are clear to the international community. Attempting to redraw technological and investment boundaries by administrative decree and politicize normal economic and trade cooperation will ultimately backfire and undermine the credibility of the domestic business environment. Adopting opportunistic strategies between major powers and trying to gain short-term advantage by "choosing sides" not only fails to achieve the intended goals, but also risks making one a creator of situations in which multiple parties lose.

China does not wish to see the situation further deteriorate and showed great patience and restraint. The wisest and most urgent move for the Dutch side right now is to, from the perspective of safeguarding the broader China-Netherlands and China-Europe economic and trade relationship and the stability and security of supply chains, adopt a responsible attitude and meet China halfway, stop interfering in the internal affairs of enterprises, and find a constructive solution to the Nexperia issue.

China will not compromise on major principles and will firmly safeguard the legitimate rights and interests of its enterprises while striving to ensure the smooth and stable operation of the global semiconductor supply chain.

The Nexperia case need not have escalated to this point. If the Dutch government truly values the broader picture of China-Netherlands and China-EU economic relations, and genuinely cares about the livelihoods of automotive workers and ordinary consumers, it should go with the trend rather than against it. The world is watching what the Netherlands and Europe will do next.