Is China ready to overtake the west in innovating high technology?

If “innovating” includes expertly infiltrating and stealing IP, the answer might be, they’re getting close.

This time, it’s the most advanced chip fabrication equipment manufacturer in the world, Netherland’s based ASML, which has accused a former China-based employee of stealing highly valuable technology secrets.

Bloomberg TV reported on the news:

“ASML Holding NV said a former employee in China stole data about its proprietary technology and export controls may have been violated as a result.” 

The Netherlands tech company provided some details regarding its internal assessment on the unauthorized misuse of data in its newly issued 2022 annual report, theverge.com reported.

ASML is crucial to the global technology supply chain since it holds some 90 percent of the market for advanced chipmaking lithography equipment, as of 2021, theverge.com noted.

ASML is the only manufacturer of Extreme UltraViolet (EUV) lithography equipment in the world, and that equipment is required by chip companies like Intel and TSMC, to make the world’s current most cutting-edge semiconductors.

China’s Authoritarian Control Comes Up Short Again On Innovation

With high-end chips being key to developing more advanced AI and automation technologies, Chinese technology companies need the most advanced chip making processes possible in order to keep pace with the U.S., Japan and other tech leaders.

But the west has stayed ahead, in no small part thanks to ASML. A former joint venture of American electronics company Philips, and a Netherlands start-up, ASML was spun off in the 1990’s, and since then has become key equipment maker for the chip making industry.

In 2018, the company perfected the practical implementation of what had previously been a theoretical EUV process. It allowed transistor sizes to defy Moore’s Law, which predicted limits on transistor miniaturization would eventually limit overall computer power.

Via EUV chip-making technology ASML now builds, computer chips designed by companies like Intel can pack transistors which measure just three nanometers. That’s about the size of a strand of human DNA.

Netherlands A Key Battleground Between U.S. and China

The Biden administration turned course in 2022, and followed Trump era policies limiting Chinese tech companies and their potential access to strategically important technologies.

Biden, via a CHIPS Act which gained bi-partisan support, put limits on American companies exporting advanced computer chips to China.

The U.S. also managed to enlist other western nations including the Netherlands to sign onto limiting Chinese strategic chip and technology access.

China has bristled against the moves. But the CCP has a history of infiltrating and stealing IP of all kinds from countries around the world, including commercial and strategic IP, as The Trends Journal has detailed. See, for example:

• “CHINA ‘TALENT PROGRAM’ GIFTED AT STEALING AMERICAN IP” (26 Oct 2021)
• “OPERATION HARVEST MALWARE OUT TO STEAL AMERICAN IP AND MILITARY SECRETS, SAYS MCAFEE” (21 Sep 2021)
•  “CHINA CHALLENGING U.S. HI-TECH DOMINANCE” (13 Jul 2021)
• “CHINA BUSINESS ESPIONAGE NETS $500 BILLION A YEAR” (29 Jun 2021) 
• “U.S.-CHINA TRADE TREATY TAKES SMALL STEPS” (21 Jan 2020)

Despite supposed “economic capitalism” permitted within their political and social system, China has repeatedly subjected their tech and business sectors to ideological interventions and dictates. 

China has cracked down on crypto technology, internet platform operators, tech education and real estate companies, as well as hounding disfavored tech entrepreneurs like Jack Ma. (See, for example, “CHINA ‘INNOVATING’ BLOCKCHAINS WITHOUT CRYPTO” 5 Jul 2022, “CHINA SHARE PRICES SLIDE ON GOVERNMENT TECH CRACKDOWN” 24 Aug 2021 and “XI RAMPS UP ECONOMIC ‘CULTURAL REVOLUTION’ IN CHINA” 27 Jul 2021.) 

The Netherlands, once a world power, remains highly important in another area that is a strategic battleground: shipping.

The country once vied with England as the world’s dominant sea and shipping power. Despite its tiny size (population approximately 19 million), the port of Rotterdam remains the shipping epicenter of Europe, and the second largest shipping focal point in the world outside of Asia.

YouTube documentarian Jack Chapple has pointed out that though the Netherlands has sided with the U.S. in limiting technology exports to China, China is making moves to gaining a higher stake in Netherlands shipping, including buying a 40 percent interest in the Cosco shipping firm.

China considers Rotterdam crucial to its “Silk Road” strategy of controlling routes of trade, and furthering a neo-mercantilist vision of economic supremacy.