A recent move by the Dutch government to take control of a Chinese-owned chip company, Nexperia, has sent shockwaves through the global car industry. The Dutch government invoked a Cold War-era emergency law that allowed it to effectively seize control of the company, citing “serious governance shortcomings and actions within Nexperia.” This move comes as tensions between the US and China continue to escalate over trade and supply chain issues.
The incident highlights a major weakness in the global supply chain of chips vital to car production, exposing vulnerabilities in key supply chains. China has imposed export controls on Nexperia chips from its Chinese facilities to Europe, while shipments of key supplies needed to make chips in China were frozen. The move by the Dutch government is seen as an attempt to counter China’s control over the global chip ecosystem.
Experts say that this incident demonstrates China’s ability to choke off global supply chains and underscore the importance of digital sovereignty. However, Beijing faces a dilemma in balancing its desire for cooperation with the EU against the need to protect its own interests. The Dutch government’s move is likely to remain under pressure until the discord over Nexperia’s ownership and operations is fully resolved.
The incident has exposed weaknesses in key supply chains and ties between China and the Netherlands, and is likely to have significant implications for the global car industry. As tensions continue to rise between the US and China, it remains to be seen how this situation will play out and what impact it will have on global trade and commerce.
Source: https://www.bbc.com/news/articles/cr43kyn9d6po