Chinese President Xi Jinping told Dutch Prime Minister Mark Rutte at a recent meeting that efforts to limit China's access to technological advancements would not deter the nation's progress. This discussion came after the Netherlands imposed export controls on advanced chipmaking tools in alignment with U.S. efforts to restrict China's access to advanced technology out of concern for national security, according to a report by the Associated Press.

SMIC..

"The Chinese people also have the right to legitimate development, and no force can stop the pace of China's scientific and technological development and progress," Xi said.

The Netherlands' decision to enforce export licensing on ASML's lithography equipment — which can be used to make logic chips using 14nm and more advanced process technology — is a big deal for China's semiconductor makers such as SMIC and YMTC. SMIC recently partnered with Huawei to produce 7nm-class smartphone processor using ASML's advanced deep ultraviolet (DUV) litho tools and the two companies are reportedly working on making 5nm-class chips, using these machines.

The ongoing tension between the U.S. and China over technology access have led China to accuse the U.S. of hindering its economic development. The U.S. does not want to China to have access to high-performance processors that could be used for artificial intelligence and high-performance computing applications, as powerful supercomputers could be used to develop China's military capabilities, as well as weapons of mass destruction. This is why American companies such as AMD, Intel, and Nvidia can no longer sell their latest products to Chinese entities without an export license from the U.S. government.

The U.S. does not want China to be able to produce its own AI and HPC processors for the same reasons. To ensure this, the U.S. has restricted American companies from selling advanced wafer fab equipment (WFE) to China-based entities, and has managed to persuade Japan, the Netherlands, and Taiwan to do the same — which has obviously upset China.

The People's Republic badly needs sophisticated homegrown lithography equipment to enable its chip manufacturers to fabricate chips using even relatively advanced process technologies, such as 14nm. The country is making some progress with domestic lithography tools: Shanghai Micro Electronics Equipment (SMEE), China's most advanced lithography scanner manufacturer, reportedly introduced its first 28nm-capable tool last year, but it is unclear whether the company can produce such machines in volumes.

In Beijing, Dutch PM raises cyberespionage with China's Xi

Chinese President Xi Jinping meets Prime Minister of the Netherlands Mark Rutte at the Great Hall of the People in Beijing.

Dutch Prime Minister Mark Rutte said he had discussed an incident of cyberespionage the Netherlands has blamed on the Chinese state during talks with President Xi Jinping on Wednesday.

Chinese state-backed cyber spies gained access to a Dutch military network last year, the intelligence agency MIVD said last month, calling it part of a trend of Chinese political espionage against the Netherlands and its allies.

It was the first time the Dutch publicly attributed cyberespionage to China, as national security tensions grow between the two countries. They are also in a confrontation over restrictions of exports of high-tech semiconductor equipment made by Dutch giant ASML to China.

Beijing routinely denies allegations of cyberespionage and says it opposes all forms of cyberattack.

U.S. and British officials on Monday filed charges, imposed sanctions and accused Beijing of a sweeping cyberespionage campaign that allegedly hit millions of people including lawmakers, academics and journalists, and companies including defence contractors.

"Of course we discuss all difficult topics," including cyberattacks, Rutte told reporters after the talks in Beijing.

"Of course this has been very openly attributed to China by the Netherlands. It was an attack on the Dutch Ministry of Defence that our MIVD has identified and also attributed to China. So yes, of course, I discussed it."

Tensions between Beijing and Western powers over issues related to cyber espionage have been rising as Western intelligence agencies increasingly sound the alarm on Chinese state-backed hacking activity. China has also begun in recent years to call out alleged Western hacking operations.