China’s trade halt with Lithuania over Taiwan ties sends warning to Europe | China

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China’s trade halt with Lithuania over Taiwan ties sends warning to Europe | China

China’s use of trade as a weapon in diplomatic disputes now appears to target Lithuania of fewer than 3 million people after the Baltic country agreed to exchange diplomatic posts with Taiwan.

However, Beijing’s unofficial halt to its already limited trade with Lithuania is more about sending out a warning to the rest of Europe, analysts said.

Lithuania and Taiwan have agreed to establish mutual representations as a sign of deepening relations between the two governments. In response, Beijing called back its ambassador from Vilnius and expelled Lithuania from Beijing.

According to the Taiwanese Foreign Ministry, it has since suspended rail freight traffic to Lithuania and has reportedly suspended export permits for the country’s producers, including agriculture, animal husbandry and timber industries.

The director of the Lithuanian national food and veterinary service, Mantas Staskevicius, told the Baltic Times on Sunday that talks with China about export permits for some items had become more difficult since the beginning of the year, but that audit and certification processes had just been suspended without Explanation.

“Our office has not yet received any additional questions or indications that something has been stopped, but a month ago the Chinese contacted us with a list of certain violations and one of our beer exporters was removed from the list.” [of companies] allowed to ship products to China, ”he said.

The trading tactics mirror those used in previous disputes with countries like Australia and its exports of coal, wine and beef. But while Australia’s economy is largely dependent on China, Lithuania’s trade is “negligible,” said Noah Barkin, a Europe-China expert with the US Rhodium Research Group. Any economic influence China had was limited, “but through retaliation [Beijing] sends a message to other countries that there will be consequences if they cross its red lines on Taiwan. “

China’s Communist Party has never ruled Taiwan, but Beijing considers it a province of China to be retaken and accuses the government of separatism. It is becoming increasingly oversensitive to any sign of support for Taiwan, which claims it is already an independent nation. Lithuania does not have formal diplomatic relations with Taiwan, but has increasingly developed friendly relations, including the promise of vaccines. It is a vocal critic of China and has withdrawn from major China-led multilateral groups.

The EU is critical of China’s human rights violations, but is proceeding cautiously. In the case of tit-for-tat sanctions, the ratification of a long-negotiated trade agreement was effectively suspended in May.

“The use of coercion by China on Lithuania will likely damage China’s standing and prestige in Europe and the world, and it is unlikely to achieve the goal it has set, at least in terms of reversing Lithuania’s policy towards Taiwan,” said Prof Steve Tsang, Director of the SOAS China Institute.

“The big question is how far will the EU go with Lithuania? Since some EU member states are particularly well-disposed towards China, it will not be easy to forge a strong and united front for the EU at the back of Lithuania. “

State media have cracked down on the country, calling Lithuania a “bite” and issuing multiple reports, both of which overemphasized trade relations while threatening that they could be terminated. On Sunday, China’s militant tabloid Global Times published an inflammatory editorial calling on the government to make plans to sever ties with Lithuania.

Dr. Andreas Fulda, Senior Fellow at the Asia Research Institute at the University of Nottingham, suggested such attacks.

“In the absence of real influence, the Chinese party-state will continue to denigrate the Lithuanian government through propaganda,” he said.

There are other factors to consider. Lithuania has also deepened its ties with the US, which has an increasingly hostile relationship with China (and increasingly supportive of Taiwan too). The US has promised Lithuania support against “China’s unilateral aggressive actions and political pressure”.

Kitty Smyth, head of China-focused UK consultancy Jingpinou, said that pivot seems to go around both Russia and the US.

“Lithuania’s political leaders seem to be betting that they will be better off under the protection of the United States. It is interesting, and perhaps illuminating, that they think so, because they probably spoke to Poland and Germany through EU channels before reaching that conclusion. “

The Lithuanian Foreign Ministry refused to comment on China’s trade bans or the alleged reasons for it. A statement said Lithuania was “determined to develop mutually beneficial relations with Taiwan, as are many other countries in the European Union and the rest of the world”.

“We hope that the recent problems in Lithuanian and Chinese relations will be resolved through diplomatic means on the basis of mutual respect and international law.”