The Hague Centre for Strategic Studies (HCSS) warned in a July report that China is building overlapping forms of leverage around the Netherlands’ critical position in advanced chipmaking, while Dutch safeguards remain geared toward individual transactions and isolated incidents.
HCSS rated semiconductors in the Dutch industry facing the highest strategic risk, citing cyberespionage, employee-enabled technology acquisition, commercial exposure, dependence on Chinese-controlled raw materials, and Beijing’s ability to apply economic and legal pressure. Maritime industries ranked second, followed by aerospace.
The assessment centers on the Dutch corporation ASML, the sole producer of extreme-ultraviolet lithography systems used to make the most advanced chips. The report argues that the risk is not simply that Beijing wants Dutch technology, but that China can pursue that goal through several channels over time.
“It is not a collection of isolated incidents,” lead author Benedetta Girardi said during a July 2 presentation. HCSS said Chinese interference tactics operate as “concerted efforts pursuing an overarching objective,” while governance fragmentation limits the Netherlands’ ability to detect and counter them.
Trade Secret Theft
A U.S. jury found that XTAL, a California company founded by former ASML engineer Yu Zongchang and other former ASML employees, had misappropriated ASML trade secrets. ASML said the employees sought personal enrichment and that it found no evidence of direct Chinese government involvement in the theft.Yu also founded Dongfang Jingyuan Electron in Beijing in 2014. Court testimony reviewed in later investigative reporting said engineers at XTAL and Dongfang had access to portions of ASML source code taken by another former employee.
Dongfang Jingyuan later received national recognition, was approved for 3 million yuan (about $418,000) in Beijing municipal award and subsidy funding, and attracted investment from Beijing-linked funds. The company’s own 2022 financing announcement listed Yizhuang Venture Capital and Beijing Guosheng Fund among investors in a funding round of nearly 1 billion yuan (about $147.7 million).
Beijing development-zone authorities have also promoted the company’s computational lithography platform as an indigenous tool for improving yields at advanced chipmaking nodes. A May 2026 government article described the platform as part of the district’s effort to localize key equipment.
The U.S. Commerce Department added Dongfang Jingyuan to its Entity List in December 2024, effectively blocking the company from obtaining U.S. technology exports.
Beijing’s Industrial and Legal Architecture
The Chinese communist regime’s 15th Five-Year Plan places semiconductor equipment, advanced manufacturing, state financing, research institutions, talent recruitment, strategic reserves, and supply-chain security inside a single national industrial program.The 2026–2030 plan calls for “decisive breakthroughs” in integrated circuits, industrial machinery, high-end instruments, basic software, and advanced materials. It directs authorities to use “extraordinary measures” against weak points in China’s industrial and supply chains.
The plan calls for increasing advanced semiconductor manufacturing capacity and accelerating development of key equipment, materials, components, high-performance processors, and high-density memory. It also directs China to raise the “autonomy and controllability” of industrial chains—Beijing’s term for reducing exposure to foreign suppliers—while building strategic reserves, backup production capacity, and security-risk assessments.
A State Council regulation that took effect April 7 gives Chinese authorities broader powers to defend what Beijing defines as supply-chain security.
The regulation creates a system for identifying critical sectors, monitoring foreign dependencies, assessing risks, maintaining reserves, and ordering emergency production, transportation, or supply. It also allows investigations into foreign actions Beijing considers discriminatory or harmful to Chinese supply chains.
Possible countermeasures include restrictions on imports, exports, technology, services, investment, transactions, data transfers, entry into China, and cooperation with Chinese organizations. The regulation does not publicly identify the industries on its key-sector list, and no public record reviewed for this article indicates that it has been invoked against ASML or the Dutch government.
Dutch Defenses
The Netherlands already requires licenses for exports of some advanced chipmaking equipment and screens certain foreign investments. HCSS said those tools address discrete transactions more effectively than cumulative knowledge transfer, long-term employee access, supplier concentration, and dependencies built through ordinary commerce.During the presentation, Girardi said protections still vary substantially between companies and that the Netherlands lacks a national directive setting common safeguards for the semiconductor sector. She identified gaps involving employee-enabled technology transfer and government oversight of long-term access and supplier dependencies.
HCSS recommended stronger investment screening, a national semiconductor continuity strategy, high-assurance operational-security standards, and tighter personnel vetting for sensitive sites. It also called for a national intelligence-sharing system connecting Dutch security agencies with strategic industries.
The report warned that dependencies developed during peacetime could become political leverage during a confrontation over Taiwan. In that scenario, HCSS assessed that Chinese pressure could narrow Dutch policy choices, delay military readiness, or limit participation in allied responses.
The Dutch government has not yet said which HCSS recommendations it will adopt or whether China’s new supply-chain regulation has changed its assessment of risks facing ASML and other Dutch exporters.
