Dutch officials invoked a Cold War-era law in late September to effectively take control of Nexperia, citing national security concerns, as chip manufacturing increasingly becomes a focus of geopolitical tensions.

The company says Beijing has, in turn, banned it from exporting certain goods from China since October 4.

"Nexperia is about mismanagement by the CEO, that's what it's about, it's not a measure directed against China," Schoof told reporters before meeting fellow EU leaders in Brussels with trade on the agenda.

European carmakers have warned the row between Beijing and Nexperia risks causing stoppages and disruption on car production lines in Europe.

It comes at a tense moment in EU-China ties after Beijing announced on October 9 new controls on the export of rare-earth technologies and items.

Brussels is pushing to urgently resolve that issue through talks, with Chinese Commerce Minister Wang Wentao expected in Brussels next week.

EU economy chief Valdis Dombrovskis, however, warned in an interview with German newspaper Handelsblatt that Brussels was "examining possible countermeasures should the conditions not improve".

"The Chinese leadership must understand that we cannot accept what is currently happening. Nevertheless, we are striving to find a mutual resolution and do not wish to escalate the conflict," German Chancellor Friedrich Merz told reporters before heading into the Brussels talks.

A European diplomat said China was not explicitly on the summit's agenda, but "unfair trade practices are -- and you know where they come from".

Diplomats pushed back at suggestions the EU could deploy a powerful trade tool called the anti-coercion instrument -- never before used -- saying that was not being considered at this stage.

"The anti-coercion instrument has never been mentioned for China at all," one EU diplomat said.

Referred to as a "bazooka" or "nuclear" option, the armoury allows the EU to take measures such as import and export restrictions on goods and services.