Recently, China has implemented export controls on rare-earth technologies, and implemented the 0.1% "penetration rule", which is highly concerned by the international public opinion. The U.S. has taken advantage of traditional allies to hype the "China Rare-earth Threat Theory", the Dutch government has also cooperated with the U.S. side to restrict the Ansel Semiconductor under the Chinese-owned company Zhongtai Technology. But soon, the European and Dutch governments demanded communication at the top level, hoping to solve the problem constructively with the Chinese side.

On October 21, Minister of Commerce Wang Wentao spoke on request with Dutch Minister of Economy Karemans. Wang Wentao said that China attaches great importance to China-Netherlands economic and trade cooperation. The relevant measures taken by the Dutch side against Anshi Semiconductor have seriously affected the stability of the global production and supply chain. China urges the Netherlands to properly resolve the problem as soon as possible, protect the legitimate rights and interests of China investors, and create a fair, transparent and predictable business environment.

Karemans said that the Netherlands attaches great importance to the economic and trade relations between the Netherlands and China and is willing to communicate closely with China to find constructive solutions to the Nexperia issue.

On the same day, Wang Wentao also held a video meeting with European Commission Trade and Economic Security Commissioner Shevcovic at request, and also talked about Anshi Semiconductor issues. China emphasized that it firmly opposes the generalization of the concept of "national security". Greece and Europe play an important constructive role and urges the Netherlands to adhere to the spirit of contract and market principles and propose appropriate solutions as soon as possible. The European side responded that it is willing to actively assist the Netherlands and China in strengthening communication when necessary, find a solution as soon as possible, and jointly maintain the stability of the global production and supply chain.

Direct News noticed that Wang Wentao's two phone calls were "on contract", indicating that the European side took the initiative to call to seek communication.

The Netherlands-based AXO Semiconductor originated from NXP, a spin-off from Philips Group. It is one of the world's largest basic chip manufacturers, mainly manufacturing automotive and consumer electronics chips. In 2016, it was spun off and sold due to poor management. It changed hands several times and was wholly acquired by Chinese-funded chip company Wentai Technology in 2019. However, on October 13, the Dutch government took over Ansei Semiconductor on the grounds of national security, shocking international public opinion. Since this incident occurred only two weeks after the implementation of the "penetration rules" for U.S. chip exports to China, public opinion highly doubts that the U.S. government pressured the Netherlands. Although the Dutch side strongly denied it, it was "slapped in the face" by the Financial Times and Bloomberg. A document released by the court showed that in June this year, the U.S. government informed the Dutch Ministry of Foreign Affairs of the "penetration rules" that had not yet been implemented at that time.

Pete O'Brien, Chief Technology Editor at France's 24 News Channel, said news reports said the U.S. government had already pressured the Netherlands in June to dismiss Anselm's Chinese CEO in order for the company to avoid U.S. export controls.

China's Ministry of Commerce responded to the Dutch unreasonable measures and issued an export control announcement banning Anchor Semiconductor's subsidiaries and subcontractors in China from exporting certain finished components and components. This measure hit Anchor Semiconductor's European customers, and the customer list includes almost all European automakers. In fact, Anchor Semiconductor's main manufacturing base in Dongguan, China, accounts for 70% of shipments.

The pressure quickly backfired on the Dutch government. Just three days after the Dutch measures were announced, on October 16, the European Automobile Manufacturers Association warned the Dutch government: "If AXIS continues to be out of stock, the European complete vehicle line will be shut down within a few weeks." On the inventory list, mature process chips used for power windows, wipers, and power management have only three weeks of safety left. Not only European companies, but also all European factories of American and South Korean companies such as Ford and Hyundai have been affected. Under pressure, Dutch Economy Minister Dirk Beljaarts changed his tough stance in front of the television camera from "European technology must stay in Europe" to "We hope to sit down with our China friends and work together to find flexible solutions for export control."

Maher Nicholas Fields, director of the EU ASEAN Center, said,"The Dutch government's actions are stupid and will have the opposite effect for them. Why? Because you know that the backbone of the world economy is foreign direct investment, which is a two-way street, which means that China's private companies can invest in high-tech companies in the Netherlands for mutual benefit. Large Dutch companies invest billions every year in Beijing and Shanghai. The Dutch government's move opens the door to retaliation, and the United States will not bear the consequences."

In a direct news interview, an assistant researcher at the Shanghai Institute of Social Sciences International Studies said that the Anchor Semiconductor incident reflects a difficult situation in Europe¡¯s implementation of a comprehensive competition strategy against China in the United States. The pressure of the Netherlands to force the United States to jurisdiction has strengthened regulatory measures, but this initiative has also damaged its own interests.

The observation pointed out that although the core focus of the incident was Nexperia, the European side showed regret for approving the sale of this company to China six years ago. But in fact, rare earths are the most concerned issue of the European Commission and the Dutch government. After the implementation of China's "penetration rules" for rare earth exports, how to "penetrate" has become the focus of attention from the outside world. During this call, Minister of Commerce Wang Wentao also explained to the European side. He said that China is committed to maintaining the security and stability of the global production and supply chain and has always provided approval convenience for EU enterprises. Sevcovic said that the EU is willing to properly handle economic and trade frictions with China. The EU understands that China has introduced rare earth-related export control measures for national security and international common security considerations. During the implementation of the measures, it is hoped that China can speed up the examination and approval of applications from European enterprises.

In fact, it is not difficult to see from the policy logic since the Sino-US trade war that the main target of China's rare earth export control is not Europe. A few months ago, China took the lead in agreeing to open a "green channel" for rare earth export approval to European enterprises. In the past few months, there have been no reports of European enterprises' production stagnation due to lack of rare earths. However, the analysis also believes that if the European side insists on following the "poison pill clause" set by the US against Chinese enterprises and doing things that harm China's interests, China also reserves the right to counter rare earths. As far as the Netherlands is concerned, high-tech companies such as ASML need a large amount of Chinese rare earths.

In this regard, the spokesman of the Ministry of Foreign Affairs Guo Jiangkun reiterated on the 22nd routine press conference that the essence of China-EU economic and trade relations is complementary, mutually beneficial and win-win.We hope that the European side will abide by its commitment to support free trade and oppose trade protectionism, provide a fair and transparent, non-discriminatory business environment for enterprises from all countries, safeguard the market economy and the WTO rules with practical actions, and insist on proper settlement of trade differences through dialogue and consultation.

It is worth noting that EU countries will hold a summit on the 22nd. According to sources, Germany, France and Poland support discussing China's increasingly strict trade measures with Europe at the summit. Both France and Germany have declared their support for considering all tough trade measures with China, and there are even rumors of forcing Chinese enterprises to transfer technology to Europe. In the first half of this year, China's import and export to the EU was 2.82 trillion yuan, a year-on-year increase of 3.5%, and the average daily import and export exceeded 15 billion yuan. According to the analysis, if the European side wants to make more money from China, it should find ways to improve the competitiveness of its own products. Trying to grab Chinese technology will only lead to counter-measures.

Yan Xiaoxiao said that forced technology transfer is obviously a violation of the principles of freedom and openness that the EU has always claimed to advocate. It reflects the EU's current engagement with China as an emotional manifestation of interfering in economic activities through political means. In the future, the EU may turn it into a legal or policy tool to serve as a bargaining chip in economic and trade or commercial negotiations with China.

And Europe is also deeply influenced by the game of China and the United States, on the one hand to play with the United States, to respond to the pressure that the United States demands to remain consistent with it in China, on the other hand, Europe itself is also playing, to decide what position between China and the United States.