Home ›› 10 Dec 2021 ›› World Biz
China has told multinationals to sever ties with Lithuania or face being shut out of the Chinese market, a senior government official and an industry body told Reuters, dragging companies into a dispute between the Baltic state and Beijing.
China downgraded its diplomatic ties with Lithuania last month, after the opening of a representative office by Taiwan in Vilnius. Lithuania’s ruling coalition had agreed in November last year to support what it described as “those fighting for freedom” in Taiwan, putting its relations with China at risk.
China views self-ruled and democratically governed Taiwan as its territory and has stepped up pressure on countries to downgrade or sever their relations with the island.
Earlier last month, a China foreign ministry spokesperson said in a statement that Lithuania had ignored China’s “strong objection” to the opening of the Taiwan office.
The Chinese foreign ministry did not immediately respond to a Reuters request for comment on this story.
Taiwan has other offices in Europe and the United States but they use the name of the city Taipei, avoiding reference to the island itself.
Lithuania’s direct trade with China is modest, but its export-based economy is home to hundreds of companies that make products such as furniture, lasers, food and clothing for multinationals that sell to China.
“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,” Mantas Adomenas, Lithuania’s vice-minister for foreign affairs, told Reuters.
“We have seen some companies cancel contracts with Lithuanian suppliers.” He did not name any companies or suppliers affected.
Threats that became reality
The Lithuanian Confederation of Industrialists, which represents thousands of Lithuanian companies, confirmed that some multinational companies that buy goods from Lithuania suppliers were being targeted by China.
