A senior government official and industry body told Reuters that exclusive-Lithuania braces for China-led corporate boycott FRANKFURT VILNIUS Reuters told multinationals to sever ties with Lithuania or face being shut out of the Chinese market.
After the opening of a representative office by Taiwan in Vilnius, China downgraded its diplomatic ties with Lithuania last month. In November of last year, Lithuania's ruling coalition agreed to support those fighting for freedom in Taiwan, putting its relations with China at risk.
China views Taiwan as its territory and has stepped up pressure on countries to downgrade or sever their relations with the island.
A Chinese foreign ministry spokeswoman said last month that Lithuania had ignored China's strong objection to the opening of the Taiwan office.
Taiwan has other offices in Europe and the United States, but they use the name Taipei, avoiding reference to the island itself.
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, said Mantas Adomenas, Lithuania's vice-minister for foreign affairs.
Some companies have had to cancel contracts with Lithuanian suppliers. He didn't name any companies or suppliers.
The Lithuanian Confederation of Industrialists, which represents thousands of Lithuanian companies, has confirmed that some multinational companies that buy goods from Lithuania suppliers are being targeted by China.
This week was the first time we saw Chinese direct pressure on a supplier to drop Lithuanian-made goods, said the Confederation president, Vidmantas Janulevicius. We had only threats that could happen before, but now they have become reality. The most painful thing is that it's a European company, said Janulevicius, referring to the multinational. Many Lithuanian businesses are suppliers of such companies. He didn't name any companies.
Lithuania is looking at setting up a fund to protect local companies from Chinese retaliation, a senior government official told Reuters.
The Lithuanian government is in talks with the companies at risk of falling out with China over possible financial support, such as loans, according to a government official.
Lithuania has appealed for support from the European Commission.
In a letter sent to top officials at the Commission earlier this week, Gabrielius Landsbergis asked for help in rebuffing China, according to a letter sent by Lithuanian foreign minister Gabrielius Landsbergis.
A strong reaction is necessary at the EU level to send a signal to China that politically motivated economic pressure is unacceptable and will not be tolerated, the letter said.
The European Commission said in a statement that the EU was ready to stand up to all types of political pressure and coercive measures applied against any member state.
The development of China's bilateral relations with individual EU member states has an impact on EU-China relations. When asked about China's actions, George Magnus of Oxford University's China Centre said that the constant drumbeat of toys being thrown out of the pram by China, targeting third-party companies was unusual and had never been seen before.
Adomenas said that Chinese authorities were curtailing exports to Lithuania, including halting export credit guarantees for Lithuanian imports from China.
He said that we will not bend to this pressure. What we decide to do, by calling Taiwan Taiwan, is up to Lithuania, not Beijing.