The Dutch foreign ministry said it was investigating reports that China had set up two "illegal police stations" in the Netherlands to monitor dissidents.
According to Dutch media reports, two Chinese "posts" have been operating in Amsterdam and Rotterdam since 2018.
The "police stations" allegedly claim to offer diplomatic assistance to Chinese nationals but have not been registered with the Dutch government.
NGOs have claimed that the facilities are actually used by Beijing to monitor and silence political opponents and dissidents abroad, using former military and intelligence officers as employees.
China's government said the reports were "completely false".
"The Dutch ministers of justice and foreign affairs have taken note of the reports ... and take the matter very seriously," ministry spokesman Maxime Hovenkamp told AFP.
"The foreign ministry is currently investigating the activities of the so-called police stations. When we have more clarity on this, appropriate measures will be taken".
In September, the Spanish human rights organisation Safeguard Defenders reported that at least 36 Chinese "police stations" have been set up in Europe.
The NGO stated that the "stations" had been used to encourage up to 230,000 Chinese nationals to return to the country, sometimes to face criminal charges.
A fresh investigation was published on Wednesday by RTL Nieuws and the investigative journalism platform Follow the Money.
Chinese Foreign affairs spokesman Wang Wenbin said that the "stations" help Chinese nationals renew their driving licenses or report changes in their civil status.
"Due to the impact of the coronavirus pandemic, many overseas Chinese citizens are unable to return to China in time to apply for driver's license renewal and other services," he told reporters on Wednesday.
"Chinese public security stations resolutely crackdown on various transnational criminal activities in accordance with the law, strictly abide by international law and fully respect the judicial sovereignty of other countries."
Diplomatic services are usually carried out by recognised embassies or consulates under the international Vienna Convention -- signed by more than 100 countries including both China and the Netherlands.
Authorities in Spain and Ireland have also opened investigations into alleged "police stations" and on Thursday the Irish government ordered one "post" in Dublin to close.
The European Commission said it was up to individual countries to investigate such allegations since it would be a matter of national sovereignty.
"But of course, the Commission will follow up closely and we stand ready to support the Member States involved if necessary," a spokesperson told reporters on Thursday.