Since the Grand Opening of HCSS Boardroom last April, Great Power Competition has intensified. The US-China competition for leadership in high-end technologies, primarily in advanced semiconductors and artificial intelligence, is accelerating. Their efforts to secure critical economic inputs, such as raw materials and foundational chips for the energy, medical and defence sectors are also intensifying. The Netherlands including its private sector has been hit by these geopolitical shock waves.
The Netherlands is also caught in the crosshairs. As of September 1, the Dutch government put in place export restrictions on ASML’s second to latest-generation lithography machines. Thus, exports to China of high-end technologies are increasingly restricted. China played its own trump card this summer: raw materials dominance. Exports of gallium and germanium, important for manufacturing semiconductors, medical systems and defence equipment, require an export licence from the Chinese government since August 1. These minerals are essential for a variety of modern technologies, including smartphones, F-16 jets, and MRI scanners. In October, the US took matters into their own hands by banning the export of more ASML systems. In response, China introduced export controls on graphite, a crucial component in energy transition, and mandated that Chinese exporters provide reports on the quantities and destinations of shipments of rare earth elements.
In January 2023, HCSS launched a new initiative: HCSS Boardroom. We leveraged our experience with corporate geopolitical due diligence to help Dutch and European companies and investor strategies to become more geopolitically shock-resistant. As the world faces increasing geopolitical fragmentation and a decaying liberal international order, HCSS Boardroom supports companies by identifying opportunities and mitigating risks. In 2023 we did this by organizing for boards of directors and supervisory boards at the Louwman Museum theatre, as well as for leaders of specific industry groups or individual companies at their respective locations.
Additionally, we completed several geopolitical due diligence projects. This involved, among other things, evaluating the geopolitical risks associated with a major infrastructure project in South America, developing strategies to address military risks that may threaten business operations in Taiwan, and identifying the most and least geopolitically unstable areas in the Indo-Pacific region for relocating production away from China. The involvement of Minister Liesje Schreinemacher of Foreign Trade and Development Cooperation in our Grand Opening, particularly her engaging Q&A session, underscores the deep-seated challenges facing Dutch firms and the government in this new geopolitical era.
As we move into 2024, HCSS Boardroom is gearing up to offer a new masterclass on an exciting theme. Masterclass #2 The Geopolitics of the Energy Transition will feature insights from HCSS energy experts Lucia van Geuns and Jilles van den Beukel. This means that HCSS Boardroom is expanding, and that four distinctive products will be offered in 2024 to make the Dutch private sector more geopolitically shock resistant.
At the same time, Joris Teer, China and Strategic Foresight Analyst, and myself will continue to teach Masterclass #1 The Geopolitics of de-coupling: Russian Gas, Chinese Raw Materials and Taiwanese Chips. We’re also wrapping up our final geopolitical due diligence initiatives. Finally, we continue to engage in interactive crisis scenario’s with boards and supply chain managers by making use of the HCSS Taiwan crisis storylines geopolitical risk exercises.
Han ten Broeke, Director of Political Affairs
Experts
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