PM Rutte’s party wants stricter rules for doing business in China

Ruling party VVD wants stricter rules for Dutch companies that do business in China. Before investing in China, companies with important technologies should be subjected to a security check to prevent technological knowledge from falling into Chinese hands, VVD parliamentarian Ruben Brekelmans said to BNR.

According to Brekelmans, the rules that already apply to exporting certain technologies to China are not enough. He said that a Dutch company that establishes itself in China could enter a partnership with a local company without any obstacle. "If there is a startup that develops technology relevant to the Chinese army, then that Duch company can simply do business in China and close a joint venture," he said.

The Netherlands needs to implement legislation now because China will continue to get hold of Western technology, Breukelman said to the broadcaster. "There are still a number of gaps in China's development," he said. "As Europe and as the Western world, we have to be very careful that we don't fill those gaps because we make our technologies too easily available."

What the security check should look like, Breukelman does not know yet. "I am now looking at what kind of roles you should set up for that." According to him, you can't just assume the good intentions and choices of Dutch companies involved. "We still see companies entering into a joint venture in good faith. Then it turns out later the Chinese communist party is part of that company after all," he said.

Boudewijn Poldermans of the China Business Council told BNR that things are much more nuanced than Brekelmans claims. Some of the facts are also "different," he said to the broadcaster.

"Today, 80 percent of companies in China are 100 percent owned by foreign parties. Joint ventures are rare and only in certain sub-sectors," Poldermans said. "Companies can also decide for themselves whether they want to invest with sensitive technology in countries like Russia and China. There are regulations in Europe and the United States against the transfer of sensitive technology. There is certainly no longer any question of coercion. The forced transfer of technology is not correct. There is no Chinese law that prescribes that. It is not true that companies that want to be active have to do so in a joint venture."