When the Dutch government invested in home-grown chipmaker
Smart Photonics this summer, it was a departure for a country with a hands-off approach to business.
A
small company with big plans, Smart Photonics was struggling to attract
financing to scale up production of its next-generation chips, whose
applications include self-driving cars and datacenters.
Smart’s chief technology officer, said in an interview at the company’s offices
outside Eindhoven,
in the southern Netherlands. “The most serious interest came from
Asia,” specifically Japan, Singapore, Taiwan and from China, he said.
In late June, just as it looked like Smart Photonics was
about to be lured to Asia, the Dutch government stepped in with 20
million euros ($23.7 million). A similar sum came from a consortium
including a government-backed agency,
PhotonDelta,
whose chief executive, Ewit Roos, raised the alarm at the Ministry of
Economic Affairs as soon as he learned of the company’s predicament.
“The government acted swiftly and decisively,” Roos said by phone.
he Dutch government says that its decision was taken to retain key
technology and wasn’t driven by concerns over China. Even so, its
investment was just the latest example of a more defensive economic
stance that has accompanied a hardening of the country’s attitude to
Beijing.
The shift has “been very noticeable, because the Netherlands has always
been that kind of small, open, free-market economy that wanted nothing
to be touched and everything to be open,” said Agatha Kratz, an
associate director at Rhodium Group in Paris.
Beijing still regards the Netherlands as an important trade partner and
investment destination, even though the Netherlands is getting “harsher”
toward China, said a researcher with the government-affiliated Chinese
Academy of Social Sciences who asked not to be identified due to rules
for speaking with media. One reason for that change is China is becoming
more competitive economically with Europe, the researcher said.
On the political front, the Netherlands angered Beijing this year by
changing the name
of its representation in Taiwan, which China regards as a renegade
province. That prompted the Chinese embassy in The Hague to request
clarification from the government. Taiwan’s president pointedly tweeted
her gratitude to the representation’s outgoing head.
Read more at:
How China Made the Netherlands Question the Free Market - Bloomberg
