It’s time to stop China’s economic hostage-taking of Lithuania

I was in Vilnius in mid-November, speaking on resisting authoritarianism at a conference on democracy organized by the bold young foreign minister Gabrielius Landsbergis. Meanwhile and elsewhere in town, a small nameplate has been installed in an office building.

Normally history is not made by office names but this one, listing the Representative Office of Taiwan in Vilnius, sparked a full-scale expansion of China’s economic war against democracies.

  • The previous Chinese boycotts took place in 2008, when the Dalai Lama (pictured) met French President Nicolas Sarkozy (Photo: European Parliament)

The Chinese government has halted bilateral trade with Lithuania.

It also puts pressure on other European companies such as German car parts maker Continental to cut their supply chains from Lithuania. China’s actions constitute a fundamental attack on the DNA of the European Union: the internal market.

Initially, in November, it was the United States that stepped in and provided urgent export credits to Lithuania. Recently, Taiwan has also stepped up its increased economic cooperation, including to make Lithuania a hub for its coveted semiconductor industry. The EU and Member States were missing.

At first, the thought in Berlin and Paris – which echoed in the Brussels bubble – was that Lithuania had pushed this issue too hard on its own.

The addition of Taiwan instead of Taipei in the name of the office was a step forward from usual practice, but in no way violated the EU’s “one China” policy.

This internal feud misses the fact that China – under all circumstances – continues to use market access and trade as tools of intimidation against Europeans.

The French, who currently hold the EU presidency, have added the concept of “strategic autonomy” to European jargon. Defending Lithuania is a test of whether the EU can provide a strategic response to China’s economic coercion.

And it is a recurring phenomenon; dating back to the last French EU presidency in 2008 when the Chinese boycotted French products and Carrefour stores following Sarkozy’s meeting with the Dalai Lama.

And it won’t be the last – unless the EU responds with force.

China argues that this is a bilateral issue and the EU should not interfere. This hypocrisy of this position is undermined by China’s own actions which attempt to destabilize the internal market by pressuring other European companies to cut Lithuania from the supply chain in order to retain access to the Chinese market.

Test case for the new German government

It is also a test for the policy of Germany’s new traffic light coalition government on China, and how forcefully the Greens are getting away with a tougher line on China. That is why it was a welcome sign to see a German State Secretary, Franziska Brantner, traveling to Vilnius this week with a clear message of solidarity with the EU and a crying warning to the Chinese that ‘the internal market is sacred”.

Now is the time to translate this into policy. It should be the EU and the Member States that intervene with credits and loans to Lithuania.

We citizens can do our part. It should be European voters and consumers who should start buying Lithuanian products like the #Freedomwine campaign supporting Australian wine after a similar irrational Chinese boycott.

Governments should explain to their companies that their response to Chinese pressure matters beyond the bottom line. It’s part of a bigger picture of defending our fundamental operating system: democracy and liberal values.

We also need to speak from a position of strength. We should learn from NATO’s military “article five” which says that an attack on one NATO ally is an attack on all. Extending this approach to the economic domain is now essential in the name of Lithuania and the sanctity of the European internal market.

This means several things. The EU should lobby on this issue at the WTO. China appears to be in fundamental breach of their access 20 years ago. This means quickly accepting the anti-coercion instrument proposed by the European Commission.

But Lithuania cannot just wait for the new European legislation.

The EU is expected to get approval from member states to negotiate strict deadlines for China to end the economic blockade of Lithuania or face gradual restrictions on China’s access to the internal market.

It’s leverage the world’s biggest economic tyrant can understand. This would show genuine European strategic autonomy and capability – and rightly so during a French presidency.

About Wanda Dufresne

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