Written by Sense Hofstede.
Image credit: ROC and Netherlands national flags at Tainan Main Public Library 1F 20220618 by Solomon203. Wikimedia, CC BY-SA 4.0 DEED.
Taiwan and the Netherlands share a long history. The island’s central position on the critical trading networks of its time sparked Dutch interests both in the 17th century and today. Dutch-Taiwanese economic ties are strong but also increasingly under intense scrutiny as the chip war heats up. Next to strong trade ties, a 1980s arms sale is the most high-profile of the Netherlands’ maritime security involvement with Taiwan. The historical, security and economic ties all touch upon sensitive issues.
History
The historical link is coming to the fore again next year. In 2024, the southern Taiwanese city of Tainan will commemorate 400 years of existence. Before Taiwan became part of China, when the Qing Empire conquered it in 1684, there was a Dutch colony from 1624 until 1662. In 1624, the Dutch East Indies Company (VOC) founded its regional trading node, Zeelandia, in what is now Tainan, driving away the local indigenous peoples and bringing over Chinese farmers.
The intensity of modern relations between Taiwan and the Netherlands are of more recent origin. After the Chinese Communist Party’s victory in the Chinese Civil War, The Netherlands still fancied itself an Asian power due to its colonial history in Southeast Asia, despite Indonesia’s rapid decolonisation. Part of this was its quick recognition of the newly established People’s Republic of China (PRC) in 1950. Relations at the level of chargé d’affaires were only upgraded to ambassadorial level on 16 May 1972.
The Joint Declaration between the Netherlands and China states that Beijing says Taiwan is a province of the PRC and that ‘[t]he Government of the Kingdom of the Netherlands respects this stand [sic] of the Chinese Government and reaffirms that it recognises the Government of the People’s Republic of China as the sole legal government of China.’ In a 2007 Joint Declaration, the Netherlands once again reaffirmed its One China Policy, according to which it recognises the PRC as the sole legal government of China.
This does not block ‘unofficial’ ties between the Netherlands and Taiwan. The 2019 Dutch policy paper on Netherlands-China relations says that its One China Policy means that the country does not maintain diplomatic relations with Taiwan but that this does not prevent ‘good economic, cultural, and scientific relations with Taiwan via the Netherlands Trade and Investment Office’.
The Netherlands Trade and Investment Office (NTIO) in Taipei was opened in 1981. In 2020, it was renamed to Netherlands Office Taipei, reflecting expanding interaction. Officially, it exists under a private entity called ‘Stichting tot bevordering van de uitvoer’ (SBU, Foundation for the Promotion of Export). It is, however, closely integrated into the Dutch overseas network.
Security
The security connection began in the 1660s when the VOC fought together with the Qing Empire—in vain—against the half-Japanese pirate-king Koxinga (Zheng Chenggong), who had taken over the colony while leading the Chinese immigrants first brought over by the Dutch. Three centuries later, after Taiwan had become a Japanese colony, the island also served as the base of the Tokyo 1941–2 Southeast Asian campaign that aimed for the oil riches of the then Netherlands East Indies.
The tensest moment of modern Dutch relations with China was the result of the sale of two advanced versions of the Zwaardvis-class submarines to the Taiwanese navy in 1981. As a result, Beijing temporarily lowered the diplomatic relations between the Netherlands and China back to that of chargé d’affaires level.
According to Reuters, part of the deal to return ambassadors to Beijing and The Hague in 1984 was a Dutch promise not to sell weapons to Taiwan again, something researchers writing in 1984 say the government supposedly already conceded to Parliament in order to obtain approval of the sale in the first place. The refusal of another request in the early nineties led to a rule in 1992 not to sell weapons to Taiwan.
The two Dutch-built submarines of what Taiwan calls the Hai Lung class are still in Taiwanese service and served as the inspiration for the design of the indigenous submarines under construction now. Next year, when the Dutch navy goes on its second Indo-Pacific mission in recent times, will the chosen ship be watched from the deep through a Dutch periscope?
Economy
The economic ties are most famously expressed by the intimate relationship between Taiwanese semiconductor manufacturer TSMC and its Dutch equipment supplier ASML. In 2021, the value of Dutch goods exported to Taiwan had quadrupled in comparison to 2010 to 9.7 billion euros, making the country the second largest export destination of the Netherlands in Asia.
The Dutch involvement in the Taiwanese technology industry goes back to the 1960s. Dutch electronics company Philips set up production in Taiwan that decade and was the third-largest manufacturer on the island until 2000. This presence is what led to the investment and patent transfer that gave the Dutch electronics giant a founding stake in the semiconductor manufacturer TSMC on par with the Taiwanese government.
A different Philips-related company is a spin-off it created with ASM, the semiconductor manufacturing equipment (SME) producer ASML. It is thanks to ASML’s machines that TSMC can produce the world’s most advanced chips.
Taiwanese bicycle company Giant’s choice to locate its European headquarters in the Netherlands makes sense, given the country’s pedalling tradition. Dutch fiscal traditions help account for its role in wind energy and other activities that made the Netherlands not only the second-largest trading partner of Taiwan but also one of its main foreign investors.
Looking forward
The Netherlands is the founding contributor to the colonial crimes that paved the way to modern Taiwan, a surprising contributor to its security, and a vital contributor to its current economic success. Within the European Union, the Dutch Indo-Pacific guidelines and economic security agenda mean it is in the vanguard of a response to China that Taiwan appreciates. Yet both sides are careful to avoid sensitivities of this complicated relationship.
The Dutch government, under departing Prime Minister Mark Rutte has been one of the leading countries within the European Union when it comes to developing policy responding to the rise of China. Its Indo-Pacific policy does not mention the word ‘Taiwan’, but the focus on maintaining the rules-based international order in the region is doubtlessly well-received in Taipei.
Global attention was drawn by the trip of the Dutch frigate HNLMS Evertsen to the region as part of the UK’s Queen Elizabeth Carrier Strike Group in 2022. The Evertsen did not traverse the international waters of the Taiwan Strait. If the planned Dutch navy return to the region in 2024 does pass through here, that will signify a next step.
Within Parliament, of the outgoing government coalition Inter-Parliamentary Alliance on China (IPAC) member Sjoerd Sjoerdsma (D66) has been the most visible supporter of Taiwan, calling on the government to support the island’s meaningful participation in international organisations and working with opposition member Kees van der Staaij (SGP) to pass a motion encouraging strengthening ties with Taiwan. A motion by Sjoerdsma and Kati Piri (PvdA) to prepare sanctions as deterrence against Chinese aggression failed. Sjoerdsma has left politics, but other supportive voices, such as Piri, Ruben Brekelmans (VVD), and Derk Boswijk (CDA), are still present.
Unlike Germany, the Netherlands’ political office holders do not meet Taiwanese counterparts due to the absence of diplomatic relations. This does not mean that there is no interaction. Dutch government officials occasionally receive Taiwanese guests or visit Taipei. At the municipal level, there are several sister city ties. Interactions are, however, generally low-profile, though coordination within the government on its China policy also allows more civil servants to learn of the space they do have.
The Netherlands, through the VOC, got first interested in Taiwan in the 17th century because of its strategic position on trade flows in East Asia that it sought to get access to. Now, again, Taiwan is at the centre of the Dutch’s most vital geo-economic interests. Taiwan matters to the Netherlands because of its economic weight, especially in high-tech. Its future will also affect the regional system in ways that the Netherlands seeks to shape in accordance with its interest in a stable and peaceful open international system based on rules. The response proposed by its Indo-Pacific Guidelines is about working with partners, both through the European Union and bilaterally.
While Taiwan awaits its January 2024 elections, the Netherlands just had parliamentary elections on 22 November. Coalition formation negotiations are expected to take a while. What the new political situation will look like and what direction it will take Dutch-Taiwanese relations is yet to be seen.
Sense Hofstede is Research Fellow at the Clingendael China Centre at the Clingendael Institute in The Hague, The Netherlands, and a Lecturer at Leiden University, The Netherlands. He has a PhD in Comparative Asian Studies from the National University of Singapore on Chinese nationalism and influence in Singapore and Taiwan. His previous degrees are from Peking University, Sciences Po Paris, and Groningen University, which included exchanges at Korea University and National Taiwan Normal University.
This article was published as part of a special issue on Taiwan-EU Relations.
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