Steps Forward in Taiwan-Netherlands Relations

Steps Forward in Taiwan-Netherlands Relations

Steps Forward in Taiwan-Netherlands Relations

On November 3 and 10, the Netherlands joined Taiwan, the United States, and Japan in co-hosting the first sessions on the circular economy and marine waste issues under the Global Cooperation and Training Framework (GCTF, 全球合作暨訓練架構). The Netherlands is the fourth country to co-host the US-Taiwan collaborative platform after Japan, Sweden, and Australia recently joined as GCTF partners. The two virtual GCTF meetings, which included representatives from 16 countries, discussed sustainable materials management solutions to marine debris, particularly focusing on leveraging the circular economy to address global marine waste. The event was co-organized with the Dutch representative office in Taiwan for the first time amid a broadening of exchanges between the two sides. While economic and political ties between the Netherlands and China are likely to remain strong over the short term, Taipei and Amsterdam can seek to expand economic and trade ties, as well as improve cooperation in several other areas, including science and technology and public health and medicine.

China’s Elevated Role in Dutch Policy

The Dutch government has placed prime importance on building relations with China and securing opportunities for Dutch companies and knowledge institutions, despite warnings from European partners and the United States against overreliance on China’s economy. “Although in practice we are in many ways closer to the US than to China, we always make our own considerations and strive for broad and close relations with China,” stated the Dutch government’s China policy memorandum released last year. Indeed, the Netherlands is a founding member of the China-led Asian Infrastructure Investment Bank (AIIB) and has actively embraced China’s “Belt and Road Initiative” (BRI, formerly “One Belt, One Road,” 一帶一路). Amsterdam believes that the BRI can offer Dutch companies logistical opportunities, transport options, and open up relatively underdeveloped areas for investment. More broadly, Amsterdam seeks to reap benefits from China’s economic development and assist Dutch companies in gaining access to Chinese markets, talent pool, and knowledge infrastructure.

The Sino-Dutch trade and financial relationship is deeply intertwined in ways that increase the difficulty of forcing Dutch divestment from the Chinese economy. China ranks as the Netherland’s largest trading partner in Asia, with two-way trade reaching USD $85 billion in 2018. The Chinese are also its second-largest foreign investor, as China’s accumulated investment in the Netherlands reached USD $18.5 billion at the end of 2017. Meanwhile, the Netherlands—referred to by Chinese state media as China’s “gateway to Europe”—is also China’s second-largest trade partner and largest importer of Chinese goods among European Union (EU) member states, as well as the third-largest investor in China among EU countries. Nearly 900 Dutch companies have operations in China.

Furthermore, the Dutch government has invested significant diplomatic capital to boost economic ties and global governance cooperation with China, including on climate change. Since taking office in 2010, Dutch Prime Minister Mark Rutte traveled to China in 2013, 2015, twice in 2018, and in 2019. King of the Netherlands Willem-Alexander also visited China in 2015 and 2018 after ascending the throne in 2013. Taiwanese media reported that a Dutch newspaper once satirized the Dutch heads of state by depicting them as queuing to go to Beijing in order to strengthen relations with the world’s second-largest economy. Beyond leadership visits, all Dutch ministries and various government agencies have ongoing dealings with China. The Netherlands’ largest diplomatic mission is in China, with representation consisting of the Dutch embassy in Beijing, four consulates-general, and six business support offices.

Concerns over Cyber Security and Human Rights

While high-level contacts between the Dutch and Chinese governments remain strong, public sentiment in the Netherlands is souring. According to a Pew Research Center survey released in October 2020, Dutch public opinion on China has reached a new low. In 2020, 70 percent of people polled in the Netherlands say they distrust Chinese President Xi Jinping (習近平) and “have no confidence in him to do the right thing in world affairs,” representing an increase of 17 percentage points since last year. Overall, 73 percent of those surveyed in the Netherlands hold unfavorable views of China, compared to 25 percent who have favorable views of China.

The Netherlands was the first EU member state to issue a China strategy paper in May 2019. The paper stressed potential security issues—including economic security, cyber espionage, and undesirable influence—raised by China’s growing influence in Europe and around the world. The policy document stated that “despite the good relations between our countries, China poses a substantial cyber threat to the Netherlands.” Indeed, the Dutch General Intelligence and Security Agency (AIVD) warned in 2017 that the Chinese Communist Party (CCP) was utilizing the latest communications technology and 5G to engage in espionage. AIVD has advised the Dutch government not to use technology from China and Russia in its new 5G telecommunications network in the coming years.

Furthermore, the Dutch government has expressed concerns about human rights and religious freedom in China. During Chinese Foreign Minister Wang Yi’s (王毅) visit to the Netherlands in August, Dutch Foreign Minister Stef Blok raised concerns about human rights in China and the potential of China’s national security law to erode Hong Kong’s autonomy. Blok also called attention to “the restriction of freedom of religion and belief in China, which affects in particular Muslims, Christians, and Tibetan Buddhists.” Dutch lawmakers used Wang’s visit to call for tougher action against Beijing and argued there cannot be “business as usual” with China while the suppression of religious minority populations continues. Given that Taiwan and Netherlands share the values of freedom, democracy, and a rules-based order, both sides should work together to combat disinformation and boost information security, commented President Tsai Ing-wen (蔡英文).

Bolstering Taiwanese-Dutch Relations

Amsterdam has adopted a “One-China Policy,” “under which it recognizes the government of the People’s Republic of China (in Beijing) as China’s only legitimate government.” According to the Dutch policy memorandum on China, Amsterdam is “alert to attempts by China to restrict the scope that exists within the framework of the ‘One-China Policy’ for maintaining good relations with Taiwan, since this would harm Dutch economic and other interests.” In the absence of official relations, the Dutch government has strong economic, cultural, and scientific ties with Taiwan, which are promoted through its representative office in Taipei.

Indeed, the Netherlands is a strategic economic and trade partner for Taiwan, specifically for its semiconductor industry. The Netherlands constitutes Taiwan’s top European trade partner and largest foreign investor in cumulative and yearly terms. The Netherlands became Taiwan’s 10th largest trading partner last year after bilateral trade reached a new height of USD $13.7 billion, up 41 percent from 2018. Dutch cumulative investments reached a total of USD $35.4 billion between 1952 and 2019, accounting for 20 percent of total foreign investment in Taiwan.

Most Dutch investments have poured into Taiwan’s semiconductor industry, and the Dutch company ASML—the largest global supplier of photolithography for the semiconductor industry—has been a major investor in Taiwan. Both Taiwan and the Netherlands are small countries with large semiconductor companies that supply a huge global market. In addition, at least 10 Dutch companies have invested in the development of the offshore wind energy industry in Taiwan. This investment is emblematic of the enhanced cooperation in science and technology, agriculture, and the circular economy. The Tsai administration has expressed hope that robust exchanges with Dutch officials can help kick-start negotiations with the EU on a bilateral investment agreement.

Dutch Representative Office Name Change

In April, the Netherlands Trade and Investment Office (荷蘭貿易暨投資辦事處) changed its name to the Netherlands Office Taipei (荷蘭在台辦事處). “By taking out the words ‘trade and investment,’ we have become more inclusive of all the other areas we are collaborating on. So clearly, less here is much more,” said Guy Wittich, who served as the Dutch Representative in Taiwan at the time. Taiwan’s Foreign Minister Joseph Wu (吳釗燮) cited the name change as evidence that “the relationship between Taiwan and the Netherlands has continued to strengthen.” Some media outlets in Taiwan viewed the name change as a “huge move” in diplomatic terms, calling it a “breakthrough” for Taiwan’s external relations. The renaming of the Dutch representative office followed similar changes to the official names of other foreign representative offices in Taiwan—including those of the United Kingdom, Australia, and Japan—over the past several years.

As expected, the Chinese Embassy in the Hague expressed outrage at the name change, lodging a complaint to the Dutch Ministry of Foreign Affairs. A Chinese commentator said that renaming the Dutch representative office suggests that the Netherlands intends to boost cooperation with Taiwan beyond trade—particularly in the diplomatic and national security arenas—calling it a “provocative move.” The Dutch behavior may trigger similar moves from other European countries to challenge the “One-China Principle,” according to an editorial in the Chinese state-run Global Times.

Furthermore, Chinese netizens called for a boycott of all Dutch products, as well as a ban on the provision of Chinese medical supplies to the Netherlands amid the COVID-19 pandemic. In April, the Netherlands reported more than 37,000 confirmed cases for a population of only 17.3 million. Amsterdam has been dependent on imports of Chinese medicines, with half of the raw materials to produce antibiotics coming from China. Yet, this very dependence on China in the healthcare sector could become leverage for Beijing to threaten and exact punishment on the Dutch government for expanding cooperative relations with Taiwan. Alternatively, Amsterdam could pursue a more beneficial partnership with Taiwan—a leading authority on public health and medicine—which also donated 60,000 face masks to the Netherlands, including orange-tinted face masks representing the Dutch national color.

Given the interdependence of the Dutch and Chinese economies and the robust government-to-government and industry-to-industry exchanges between the two countries, sudden and complete Dutch divestment from China is unlikely in the short run. Therefore, the Netherlands will continue to grapple with China’s role and rising influence in Europe and abroad. Nonetheless, there is still room for Taiwan and the Netherlands to bolster ties. Taiwanese-Dutch partnership in public health is a promising area for enhanced cooperation. Strengthened exchanges could alleviate Amsterdam’s dependence on Chinese medical supplies and expertise, which could be used as a political tool against growing Dutch cooperation with Taiwan, particularly during the ongoing COVID-19 pandemic.

The main point: The Dutch government has made strong relations with China a foreign-policy priority. Nonetheless, there is still room for Taiwan to collaborate with the Netherlands in an unofficial capacity and expand multifaceted cooperation.