Lithuanian exports to China dropped by more than 90 per cent in December following the opening of a Taiwanese diplomatic office in the Lithuanian capital of Vilnius under the name of Taiwan. The Chinese deny they are engaged in a trade boycott, but the dispute is affecting companies from other EU countries that use components made in Lithuania.
Beijing (AsiaNews) – China has almost ended the import of Lithuanian products in retaliation for the decision by the Baltic Republic to allow Taiwan to open a representative office under its name.
According to the Chinese government, the failure to use the name Taipei is a violation of the one China policy. For the Communist Party of China, the island is a rebel province to be reunited by force, if necessary, with the motherland.
In addition to downgrading diplomatic relations with Lithuania, Beijing has taken coercive economic measures against Vilnius.
Data published yesterday by the Chinese Customs Office shows that Lithuanian exports to China fell by 91.4 per cent in one year in December, 91.1 per cent in November.
Last month, goods from Lithuania worth US$ 3.85 million entered China compared to US$ 43 million the year before and US$ 42.8 million in November.
In fact, China has cut Lithuanian suppliers out of its market completely.
Officially, Chinese authorities continue to claim that they have not taken such a measure, but that the trade blockade is done spontaneously by Chinese companies, ready to boycott any country that threatens Chinese sovereignty with its policies.
Recently, the President of Lithuania, Gitanas Nauseda, said it was a mistake to allow the Taiwanese mission to be opened with the name challenged by Beijing.
A poll shows that the Lithuanian government’s approach to China has little support in the Baltic nation. However, representatives of the ruling coalition in Vilnius told AsiaNews that the line on relations with Taiwan will not change.
The European Union officially backs Lithuania, but in practice it has not taken any measures against China. The EU and many member countries do not want to endanger trade relations with the China.
German, French and Swedish companies are concerned because Chinese customs authorities are rejecting their products that contain components made in Lithuania.
Reuters reports that German entrepreneurs and investors are asking Lithuanians to find a compromise with the Chinese.
Meanwhile, the EU is bidding for time. It has launched an investigation to ascertain any violations by China to be submitted to the World Trade Organisation.
As the South China Morning Post reveals, European companies hit by the Chinese retaliation are reluctant to cooperate, fearing that they will have to face a further squeeze from Beijing.
France, the current president of the Union, has promised to speed up the approval process of an EU anti-coercion instrument to be used against trade intimidation like China’s towards Lithuania.
However, it will take a long time before the directive is implemented, and, as often is the case with the EU, its application by individual states will need to be assessed.
Still, the group of EU member states seeking greater cooperation with Taiwan is expanding.
Slovenian Prime Minister Janez Jansa recently announced that his country and Taiwan will open representative offices in their respective countries. It remains to be seen which name will be used.
For its part, the new Czech government, which is very critical of China, seems ready to follow the path of Lithuania by strengthening ties with Taipei.