Beijing’s retaliation shows rising China-Europe tensions ahead of high-stakes trade talks with the US
[BEIJING] Nexperia says it has been banned from exporting products it makes in China as Beijing hits back at the Dutch government for taking over the management of the company.
The Dutch government said on Oct 12 that it has taken over the company using a Cold-War-era law for the first time, ensuring Europe retains access to Nexperia’s chips. The company is a subsidiary of Chinese Wingtech Technology and a key supplier of mature chips used by the automotive and consumer electronics industries.
The Chinese Ministry of Commerce issued an export control notice earlier this month, prohibiting Nexperia China and its subcontractors from exporting some components, the company said in a statement on Tuesday (Oct 14). Nexperia said it is trying to obtain an exemption.
Beijing’s retaliation shows how tensions are ratcheting up between China and Europe leading into high-stakes trade talks with the US. US President Donald Trump and Chinese leader Xi Jinping are set to meet to hammer out a trade accord this month with both sides announcing restrictions in the run up.
Last month, the Trump administration expanded US sanctions to include subsidiaries of blacklisted companies and underscores growing scrutiny of Chinese-owned companies in sensitive industries. That affects Nexperia as part of Wingtech, which was added to the so called “entity list” – a trade blacklist – late last year.
The export ban on Nexperia’s Chinese operations may undermine Dutch efforts to retain access to the chips.
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Nexperia has an 80,000 square metre assembly site in Guangdong province, bordering Hong Kong. It also has fabrication and assembly and testing operations in Germany, the Philippines, Malaysia and Britain, according to its website.
The Dutch ruling resulted in Nexperia’s chief executive officer Zhang Xuezheng being suspended. Zhang founded Wingtech.
Chief financial officer Stefan Tilger will be acting as interim chief executive officer, Nexperia said in the statement.
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“The combination of Zhang Xuezheng’s behaviour as CEO and indirect shareholder, as well as concerns about the semiconductor product availability in the Netherlands and Europe, ultimately led to the Dutch government to intervene,” Nexperia said in the statement.
Wingtech shares shares dropped by their 10 per cent daily limit for a second day on Tuesday. BLOOMBERG
