The Strategic Reconsideration of the Netherlands-China Relations

The Strategic Reconsideration of the Netherlands-China Relations

The recently published China strategy is a reluctant first step by the Dutch government towards a fundamental reconsideration of its China policy in response to China’s more assertive foreign policy.

Until quite recently, the Dutch looked over to China as the golden land of business opportunity. Upon China’s opening-up to the outside world under Deng Xiaoping in the late 1970s, state visits and trade delegations secured business deals and pryed open the door to the vast Chinese market for Dutch firms.

Sometimes, this required smoothing out political issues, such as back in the 1980s when a Rotterdam-based shipbuilding company sold two submarines to Taiwan. The sale was 'punished' by China with cancelling trade orders from their Dutch manufacturers. Consequently, potential later purchases of submarines or other military equipment from the Netherlands were resolutely blocked for Taiwan. In another instance, the government saw itself as a mediator for Dutch airliner KLM when it could not open a fly route to Beijing, as it was also flying to Taiwan. Occasionally, Dutch state leaders would also raise human rights concerns. Yet all the while, the assumption underlying the approach towards China was that it was developing and creating a middle class society, and that eventually political opening and reform would follow naturally. China was thus to be integrated in the existing international economic and political order, and corresponding policy efforts were directed at making China a 'responsible stakeholder' in the latter.

Slowly but surely, however, the realisation has started to sink in that China’s economic reforms and opening-up are not necessarily followed by political reforms and democratisation along envisioned Western lines. Since Xi Jinping’s accession to the Party leadership in 2012, the Chinese Communist Party has both strengthened its domestic hold on power and asserted itself more strongly in China’s foreign policy. Reluctantly, political leaders and policymakers are accepting that China is not the status quo power that they assumed and hoped it would be. Instead, it is actively seeking to influence and change existing international institutions such as the UN and the WTO, to name just a few. In addition, China is also establishing parallel organisations whose activities overlap with those of already existing bodies. The Asian Infrastructure Investment Bank that began its operations in 2016 is a good example of that. These developments evidence a turning point for policymakers, forcing them to fundamentally reconsider their strategic orientation towards China.

So too in the Netherlands. Following renewed strategic proposals for China policy in France, Germany and at the EU level, and reacting to increasing domestic calls to formulate a strategic reponse to China’s expanding influence, the government presented its new China strategy in May this year. The strategy presents a detailed overview of the bilateral relations between the two countries, outlining areas and opportunities for strengthened cooperation, but also identifying a range of issues and risks. The latter include concerns regarding unfair trade practices, restricted access to the Chinese market, industrial (cyber)espionage and theft of intellectual property, forced technology transfers, strategic dependence on China in key sectors, the infiltration of vital infrastructure, and the erosion of key values in the international arena. Noticeable, in particular, is the increasing attention on matters of national security in relation to China.

Formulating the policy brief seems to not have been an easy task. News sources report that the eight departments involved struggled to align their agendas and views on the matter. The AIVD (the Dutch intelligence and security services) and the Ministry of Justice and Security make a case for lessening the dependence on China as much as possible to avoid national security risks, whereas Economic Affairs wants to protect trade relations and business interests, all the while Foreign Affairs is hesitant to cause problems by provoking China. Tellingly, the strategy was presented when the newly appointed Chinese ambassador to The Netherlands was presenting his letter of credence to the king—completely coindincidental, assured Stef Blok, the Minister of Foreign Affairs in his presentation speech.

The strategy was met with mixed responses. Some argue the government is not taking China’s contempt for human rights seriously enough. Others warn of the dangers of “China bashing” and moral arrogance, arguing that the West needs to see China’s re-emergence in its proper historical context. The most common critique is that the policy brief’s envisioned measures are too vague and thus cannot really qualify as strategic. In many areas, critics note, the policy brief simply does not make the tough decisions that are necessary to secure vital interests in the long term. Indeed, much of the strategy’s proposals defer issues to the EU level. Blok defended this approach in his speech. Against China, he argued, individual EU member states are simply too small to have much influence. European states need to band together, speak in one voice and act in unison in order to defend interests and values at stake, he added.

Though this may be true enough, there is also a palpable hesitation on the government side to be the EU member state who takes the lead in this process – perhaps a leftover caution as a result of earlier incidents in relations with China. The tension between open trade relations and their increasing national security implications is a tricky one with far-reaching consequences for Dutch self-identity as a liberal trading nation. It will force policymakers to make tough decisions in terms of defining the most vital Dutch interests, and how to best defend them together with European partners in a rapidly changing international environment.