Lithuania Facing Corporate Boycott Triggered by Beijing

By Jonathan Walker | December 10, 2021
Jonathan loves talking politics, economics and philosophy. He carries unique perspectives on everything making him a rather odd mix of liberal-conservative with a streak of independent Austrian thought.
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GLASGOW, SCOTLAND - NOVEMBER 02: Gitanas Nauseda, President of Lithuania, speaks during the UN Climate Change Conference on day three of COP26 at SECC on November 2, 2021 in Glasgow, Scotland. Lithuanian companies are facing difficulties doing business with China. (Image: Hannah McKay - Pool/Getty Images)

Lithuania is facing a hard time doing business with China after Beijing reportedly instructed multinationals to cut off ties with the tiny European nation. China’s trade censorship follows Lithuania’s decision to allow Taiwan to open a representative office in its capital city of Vilnius.

In November last year, Lithuanian lawmakers had agreed to support “those fighting for freedom” in Taiwan, thereby inviting Beijing’s wrath. The opening of Taiwan’s Vilnius office was part of this resolution. The communist regime sees Taiwan as a part of a unified China and does not tolerate any mention of an independent Taiwan. Chinese leader Xi Jinping has even declared that he will not shy away from using military force to annex the island.

In November this year, Beijing downgraded its diplomatic ties with the European country. Chinese foreign ministry spokesperson Wang Wenbin blamed Lithuania for allowing Taiwan to set up an office in its country as it gave a “false impression” of the island being separate from the mainland. This “harmed China’s sovereignty and territorial integrity,” Wenbin said. According to Wang, Lithuania’s actions also established an “egregious precedent” in the international community. China will “firmly safeguard” its territorial and sovereign integrity as well as core interests, he added. 

According to the Lithuanian Confederation of Industrialists, a European multinational company was forced to drop Lithuanian goods.

“They (China) have been sending messages to multinationals that if they use parts and supplies from Lithuania, they will no longer be allowed to sell to the Chinese market or get supplies there… We have seen some companies cancel contracts with Lithuanian suppliers,” Mantas Adomenas, Lithuania’s vice-minister for foreign affairs, told Reuters.

Lithuanian companies are complaining of being “wiped” out from China’s customs portals, meaning that these firms are now unable to choose “Lithuania” as the origin for goods. As a result, the companies are unable to fulfill their orders. 

Goods that are supposed to be shipped off to Lithuania are now tied up at Chinese ports. It is not just Lithuanian companies being affected by China’s actions. Products from a French clothing company that used goods sourced from Lithuania were rejected by a Chinese customer.

Alarmed at the situation, Lithuania has appealed to the European Commission. The government recently sent a letter to the Commission, asking for strong action against China, deeming it essential to convey the message that “politically motivated economic pressure is unacceptable and will not be tolerated.”

The European Commission responded by stating that it is willing to protect its member states against all kinds of coercive tactics. The EU has raised the matter to the World Trade Organization.

“Unity and solidarity within the EU remain key to upholding our interests and our values in our relations with all countries… If the information received were to be confirmed, the EU would also assess the compatibility of China’s action with its obligations under the World Trade Organisation,” said a Dec. 8  joint statement by EU Vice President Josep Borrell and Executive Vice President Valdis Dombrovskis.

The EU requested that China meet and discuss the issue with its Lithuaian counterparts, but Beijing denied the request, claiming that it is busy dealing with the COVID-19 pandemic. In an interview with South China Morning Post (SCMP), Adomenas said that he was “not surprised” that Chinese officials had refused to meet up, describing the action as “hypocritical.”

“They are not too busy to engage in sniping against Lithuanian companies. When dealing with China, one needs to be prepared for anything. We know from dealing with communist regimes of the past, they are not constrained by international rules,” Adomenas said.