A Dutch software company that could shape EU-China relations for decades

Datenna uses open source intelligence (OSINT) to provide governments with the data they need to make policy decisions about China.

The company does not consult or advise, nor does it work with private companies. It only provides state actors with unfathomable levels of detail about the business, administrative and technological landscape in the world’s second largest economy.

And as governments seek to build economic security policies designed to contain or catch up to China’s progress—as long as Beijing restricts access to official data—this information is becoming like gold dust.

The company’s software tracks “an incredibly large array of details, including the intricate details of more than 45 million corporate entities and research institutes within China,” CEO Jaap van Etten told the South China Morning Post in a rare interview.

Governments buying software-as-a-service can search through reams of data, as they would a search engine, to help them decide whether a Chinese company or organization investing in Europe—or receiving European investment—has military ties, for example.

“Datenna is more than a company, we are the answer to a changing world, providing irreplaceable insights into China’s techno-economic landscape,” said van Etten.

In Europe, the topic of data runs through almost every conversation about China. This will become a key question for the next five years if Ursula von der Leyen seals another term as head of the European Commission in June, as is expected.

European companies complain that China’s data transfer rules are too vague and “present serious operational and compliance challenges” for companies that need to make global decisions.

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Officials in national capitals are concerned that data collected by Chinese-owned companies could be accessed by authorities in Beijing, pointing to Nuctech scanners at airports across the continent and the 134 million users of the short video app TikTok within the European Union as examples.

At the EU level, a debate is developing over whether Europe, which is considering tariffs on Chinese-made electric vehicles and solar panels, is asking the right questions when it comes to trade policy.

“These electric vehicles are collecting huge amounts of industrial data… You might think you’re just driving a car, but China is building a huge database. We don’t know what benefits it could bring,” said a senior EU official who wished to remain anonymous.

But in Brussels at least, the real value of the data is most often discussed in relation to von der Leyen’s plans – announced on the last day of March a year ago – to de-risk relations with China.

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Von der Leyen’s economic security strategy calls on 27 member states to check outbound investment in sensitive sectors of the Chinese economy. It also advocates an EU-wide export control regime to prevent sensitive technology from falling into the hands of the People’s Liberation Army.

In a Brussels cafe the day after the announcement, one senior official complained that the EU was ill-equipped to put forward such ambitious plans: “How can we monitor, let alone control, investment by private companies in China?”

The official, nervous about the levels of data needed to create effective policies in 27 countries, noted “there’s a reason the US has spent five years working on screening outbound investment and still doesn’t have a plan.”

“I’m falling [von der Leyen] he wants an announcement, which can be ready tomorrow. But if you want a functional policy, it will take years,” the official said.

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The situation had barely progressed in January, when the EU released further details of the package, announcing that consultations and risk assessments between member capitals would take more than a year.

At the time, European trade chief Valdis Dombrovskis told the Post that “as far as foreign investment is concerned, that is certainly an area where many member states have expressed caution or criticism.”

“But it’s clear that we don’t have much information because neither the EU nor the member states actually monitor outbound investments and do risk assessments for investments that could end up as sensitive technologies,” he said, adding that data collection would begin now.

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Van Etten sympathizes with policymakers’ plight. In his 10 years working in science and technology in Beijing – much of it as a diplomatic attaché for the Dutch embassy – he encountered similar problems every day, which led to the founding of Datenne, he said.

“I have watched China’s rapid rise as an economic and innovation powerhouse, a shift that has gone largely unnoticed globally. It became clear to me that there is an urgent need to understand this transformation and its geopolitical implications.”

With his background in software engineering and experience with a search engine company, van Etten saw the untapped potential of OSINT, “especially in terms of China’s advances in universities, companies and research and development.”

“I realized that traditional, manual data collection methods were inadequate to keep up with China’s rapid development,” he said.

As governments scramble to build a comprehensive picture of investment flows into China, Datenna is arguably in a unique position to capitalize.

“Back in 2014, we recognized the significant impact that China was poised to have on the global economy and technology sector. However, it was not until 2018 that the market fully understood,” said van Etten.

“In essence, being ahead of the curve then allowed us to perfectly time our market entry.”

The EU’s early efforts to build these policies were plagued by internal conflicts and territorialism. Member states have accused Brussels of trying to take over the powers normally held by capitals and of mixing national security issues with economic problems.

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“It will be extremely difficult,” said Francesca Ghiretti, an expert on the European economic security landscape at the Center for Strategic and International Studies.

“Most member states not only do not have this data, but they do not know how to collect this data. And they hardly have the capacity to collect data on inbound investments, let alone on outbound export controls,” she said.

But access to data is only part of the problem, according to Ghiretti. Capitals are also reluctant to share sensitive commercial information among EU members, who also compete with each other economically.

There is also a security issue. Information shared in Brussels eventually – inevitably – leaks to the press, while the presence of Hungary, a close ally of China, in the room has given some governments pause for thought, Ghiretti said.

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Despite the early problems at the EU level, economic security is not disappearing.

“The world will not suddenly become safer, the world is becoming more and more complicated. Eyes and minds will become more focused on these issues,” another senior EU source said.

Van Etten describes the task facing policymakers – “putting together China’s economic and technological puzzle” – as formidable, “especially when it comes to implementing export controls and managing outward and inward investment.”

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The primary challenge is scale. Maintaining data on a daily basis “could easily turn into a full-time job,” with the painstaking nature of data collection representing a major market opportunity for Datenna and other providers, he said.

“To draw an analogy, when you need to write a letter, you don’t create new word processing software, you use existing tools like Microsoft Word or Apple Pages. Similarly, in navigating the complex economic landscape of China, the use of specialized software becomes indispensable.”

According to van Etten, Europe is on a “journey towards understanding the full extent” of the data’s implications for economic and security policies.

“There is a growing realization [in the West] about how integral this data is, not only to China, but to any major player on the global stage,” he said.

“Better data leads to better intelligence … this is a lesson that China, through its history of catching up and now leading in certain areas, exemplifies and that the West is increasingly appreciating.”