Less trade with China will cost the Netherlands a lot of money

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The call to make the Netherlands and the EU less dependent on China is increasingly heard. The country would have too much power and there are security risks associated with it, the argument goes. The Central Planning Bureau (CPB) and Statistics Netherlands (CBS) acknowledge this in a study on Thursday, but add that phasing out this trade will not be cheap.

The Dutch government recently excluded a Chinese company from a tender for the construction of electricity infrastructure in the North Sea for fear that China is hiding sensors in the pipes, NU.nl reported on Thursday. This gives the country access to sensitive information.

This is not the first time that security issues have arisen regarding the interdependence between the Netherlands and China. The CPB and CBS confirm in a study that these concerns are not unfounded. In addition, there are geopolitical risks to the dependence of the Asian country.

But if we want to reduce this trade, it will cost us something, the accountants say. Dutch exports are up 2.6% thanks to cooperation with China and accounted for 66,000 jobs in 2020. The whole EU has a 1.8% export advantage from China. All of this could be lost in one fell swoop if we end the partnership.

Other than that, finding new suppliers or recalling production capacity from China would incur one-time transition costs which can be high. The exact height is difficult to estimate.

The collaboration between the Netherlands and China mainly focuses on semiconductors for computer chips. Along with ASML and NXP, our country has a number of major chip companies. But it is precisely with these products that there are major security risks because they are full of sensors.

This is why there has been a political call for some time to become less dependent on the country. “The Netherlands will have to weigh the geopolitical risks and costs of phasing out,” the researchers say.

In addition, our country imports, among other things, steel, electrical appliances and coal from the Asian country.

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