Dutch 'sub' sale irks China

The Netherlands has incurred the ire of the Chinese government over a project to sell two conventional submarines to Taiwan. The final contract may not be signed for another six months, but the Dutch government has given its blessing and the Dutch Parliament Dec. 18 defeated a motion asking the Cabinet to reconsider.

A Chinese Foreign Ministry spokesman expressed "strong dissatisfaction and deep regret" over the Dutch decision. "The sale of arms to Taiwan has gone far beyond the range of people-to-people trade," the spokesman said, adding that "the decision of the government of the Netherlands has violated the basic norms guiding relations between states as well as the principles set forth in the 1972 communique on the establishment of diplomatic relations between China and the Netherlands."

China is believed to be upset over the impending sale not only for its own sake but also for the precedent it will set for Western nations making arms sales to Taiwan. Peking is particularly anxious to remind the incoming Reagan administration that it will face a major crisis in Sino-American relations if it goes through with sales of fighter planes Taiwan has long been seeking.

Showing that China's protest is intended not for the Dutch alone, a commentary in the People's Daily Dec. 21 said: "In the world today, there are certain people who approach and would like to handle their relations with the Chinese people as they used to. They agree to China's position, recognize the government of the Peoplehs Republic of China and normalize their relations with it. Yet, at the same time they want to have ties with Taiwan above the governmental level and even to create two Chinas. This is intolerable to the Chinese people. The Chinese government and people will not give in on a matter of principle."

The commentary also warned that if the Dutch government went ahead with the project, it "will jeopardize bilateral economic cooperation in the days to come."

The Dutch government's position is that at a time of severe economic recession it cannot afford to thrown away an opportunity to safeguard employment in the depressed shipbuilding industry. The contract is said to be worth $500 million, approximately half of which is for the two modified "Zwaardvis" class submarines, and the rest for nonmilitary equipment such as boilers for steam generating plants. The Taiwan authorities have cleverly made a package deal with the Dutch Rijn-Schelde-Verolme firm under which the civilian purchases will not be made without the naval component. Taiwan has two outdated former United States submarines.

If the Dutch sale goes through, it will have two modern diesel-electric submarines -- nonnuclear certainly, but probably superior to what the Chinese now have. If the contract goes through, the submarines are to be built by 1985. The Dutch government is involved because it must grant export licenses for the sales. The Dutch position is understood to be that the sale will be approved but that the final export license will be granted only after completion of the two submarines in 1985, at which time a new judgement in 1985, at which time a new judgment will be made, based on the taste of tension in the area. In other words, Taiwan will not have a final assurance that it will obtain the submarines until after they have been built.

The principal Dutch opposition party, the Labor Party, has criticized the Cabinet's decision as "shortsighted, opportunist and irresponsible." The present Dutch government is a coalition of Christian Democrats and Liberals, headed by Andreas Van Agt. The announcement of the deal was made immediately after Mr. Van Agt had concluded a state visit to China that was highly successful in public relations terms and that had concrete economic results.

Holland's trade with China in 1979 was roughly $300 million -- $150 million each in imports and exports. With Taiwan, trade came to about $350 million altogether in 1979, with imports from Taiwan outrunning exports by more than $ 150 million.

The submarine deal will help to redress the balance and will also keep 1,000 men at work for at least five years. Other Western governments have been watching the course of the Dutch-Taiwan talks and the Peking response thereto with interest. There is sympathy for the Dutch shipbuilders. There is sympathy for the Dutch shipbuilders, but there is also some uneasiness as to Taiwan's purpose in seeking to buy vessels.