How little Lithuania dragged the EU into its showdown with China – POLITICO
Press play to listen to this article
VILNIUS — The diplomatic showdown between Lithuania and the world’s second-largest economy began with just one word.
In August, Vilnius authorized Taiwan’s request to set up a “Taiwanese” representative office in the country. Using that name offended Beijing, which insists the island is part of China and prefers “Taipei” to be used instead.
The row quickly escalated. Though Vilnius stressed the move did not reflect a challenge to Beijing’s “One China” policy, the decision — the first of its kind in Europe — was seen by many as a potential first step toward eventually recognizing Taiwan as a separate country.
China recalled its ambassador, a diplomatic form of protest it hasn’t used for years, and insisted that Lithuania withdraw its envoy. Freight train services connecting Vilnius under China’s Belt and Road Initiative were suspended; so were the new licenses that Lithuanian food exporters were applying for. Initial expectations that Lithuania could become an important EU destination for Chinese fintech investors all but dissipated.
“It’s like the classic Chinese saying: ‘Killing a chicken to scare the monkey,'” a senior EU diplomat in China said, requesting anonymity as he wasn’t authorized to comment publicly. “Beijing is sending a message that whoever follows Lithuania’s example, of daring to stand up to it, will face severe consequences. And such a message is best tested on a smaller country.”
Beijing is now watching whether the monkey — the European Union — will take the side of the chicken or its butcher.
On the agenda
The United States has already backed Vilnius; last month, Secretary of State Antony Blinken underscored “ironclad U.S. support for Lithuania in the face of attempted coercion from the People’s Republic of China,” after a meeting in D.C. with his Lithuanian counterpart.
The EU, so far, has been more equivocal. In his recent strategic dialogue with Chinese Foreign Minister Wang Yi, EU foreign policy chief Josep Borrell defended Lithuania but also took pains to reassure Beijing that the EU was not questioning its “One China” policy.
“The EU and its member states have an interest to develop cooperation with Taiwan, a like-minded and important economic partner in the region, without any recognition of statehood,” he told Wang.
On Tuesday, the 27 EU leaders gathered for a dinner that involved a discussion on EU-China relations, in which Lithuania’s President Gitanas Nausėda called on his peers to send a message of “unity” in the face of China. The dinner ended up with what Borrell called “a very interesting debate.”
“There is a big bipolarity between China and U.S. on one side, and on the other side there’s a multipolarity of actors,” he said. “And Europeans have to act; Europeans have to create a common strategic culture to share the challenges they’re facing.”
While the EU’s strategic compass is still being drawn up, one thing is clear: In facing off against Beijing, Lithuania — population 2.8 million — has pushed the subject of Taiwan and relations with China more prominently onto the EU’s agenda in a way that leaders in Beijing and many European capitals have been avoiding for years.
And, for the moment at least, Vilnius shows no signs of backing down.
Lithuania insists it had not intended to upset Beijing and several high-level Lithuanian officials said they would like to dial down the spat, but no sign of rapprochement seems to be in the pipelines. On the contrary, a Taiwanese government-led trade delegation is soon visiting Lithuania, as well as the Czech Republic and Slovakia.
“A resolution of this situation depends on both sides. We are ready to talk, but we would not be ready to reconsider … our decision,” Nausėda told POLITICO in an interview. “There are many representative offices in the European Union, which were established [by Taiwan] in the last 20, 25 years. And Lithuania did nothing special in this regard.”
Nothing to lose
Lithuania isn’t the first EU country to get into a diplomatic tangle with Beijing — but it’s unusual in that it has little to lose from the spat.
Countries like France and Germany have significant business connections to China, making it hard for their leaders to take critical stances, even on issues like allegations of genocide and forced labor in China’s far west Xinjiang region. Other governments, like Greece or Hungary, depend on Chinese investment.
When in 2013 a Spanish court ordered international arrest warrants for five retired top Communist officials over crimes against humanity in Tibet, Madrid — conscious that large quantities of government bonds were in Chinese hands — moved quickly to still the waters. More recently, Sweden has been reluctant to escalate a disagreement over human rights to the EU level when Gui Minhai, a Swedish-Chinese bookseller who published titles critical of the Communist Party (and Chinese President Xi Jinping personally), was jailed for 10 years.
Lithuania, by contrast, has few business ties with China. “Could you believe that we invested 10 times more in China than China in Lithuania?” said a senior official in Vilnius, speaking on condition of anonymity. There were “three million euros worth of Chinese investment — yes in this country, only three million from China. Our companies invested almost 40 million euros in China,” he said, adding: “The big China is small.”
A case in point is the deepwater port of Klaipėda, 300 km west of the capital Vilnius, where Lithuania has been holding off investment by the state-owned China Merchants Group over security concerns. “China was interested in investing more in our infrastructure and other sectors, which are sensitive in national security,” said Nausėda. “But we have a national screening system for such strategic investments.”
Speaking to the Baltic Times just before he got recalled, the Chinese ambassador to Vilnius, Shen Zhifei, rejected the assertion and criticized Lithuania’s own lack of vision.
“Trade is not just decided by a country’s size. Even a small country like Lithuania could become big players like Singapore and the Netherlands,” he said, according to a transcript on the Foreign Ministry’s website. “Lithuania has still got to present a friendly and responsible image for Chinese consumers.”
Freedom to criticize
Lithuania — a country whose post-Cold War identity has revolved around the fight against communism and authoritarianism — has rarely shied from using its freedom to criticize.
Vytautas Landsbergis, a leader of the independence movement, had a frosty relationship with Beijing. During a 2000 visit at the Great Hall of the People, Landsbergis, then speaker of the Lithuanian parliament, began a blunt conversation about Tibet and human rights.
His host, Li Peng, a former Chinese premier and then chairman of the standing committee of the National People’s Congress, wasn’t pleased. “Li Peng didn’t eat his dessert and left,” a person who attended the dinner said on condition of anonymity. “Everyone had to stand up and leave too.”
A few months later, Li cut a planned two-day visit to Lithuania short after he discovered the Lithuanian parliament was holding an international meeting on the crimes of communism. The Chinese delegation departed after only a few hours, having met with officials including Landsbergis but never leaving the airport.
Fast forward 20 years and Lithuania’s government — in which Landsbergis’ grandson, Gabrielius Landsbergis, is foreign minister — has shown a similar disregard for Chinese pressure, if not going further.
Just half a year into his first ministerial stint, the younger Landsbergis declared in an interview with POLITICO that Lithuania would be pulling out of China’s “17+1” diplomatic platform with Central and Eastern Europe.
“China under Xi Jinping is turning into revanchist, increasingly belligerent — even authoritarian is no longer an adequate adjective,” Lithuania’s Deputy Foreign Minister Mantas Adomėnas told POLITICO.
It is time, he said, for the EU to move beyond defensive trade policies against China. “Wandel durch Handel, the German formula of change through trade, doesn’t work,” he added. “When we are facing an era where our geopolitical considerations will come to the fore, economic interpenetration can become a liability, or something that can be exploited, instrumentalized or even weaponized.”
Economy Minister Aušrinė Armonaitė, head of the liberal Freedom Party, is especially keen to develop ties with Taiwan. On a visit to Washington last month, she met the Taiwanese Ambassador Hsiao Bi-khim, a close confidante of President Tsai Ing-wen. It will be up to Armonaitė to appoint the country’s next top envoy to Taiwan, since the position won’t be a diplomatic posting — which for Beijing is actually milder than the EU or U.K. arrangement where their top envoys in Taipei are indeed diplomats.
In the meantime, Lithuania’s president, Nausėda, continues to press his EU counterparts to join him in presenting a common front toward Beijing. He has repeatedly suggested holding a “27+1” meeting with Xi, an idea once championed by German Chancellor Angela Merkel before it was derailed by the coronavirus pandemic and a deterioration in EU-China relations over human rights sanctions. For Nausėda, while it’s perfectly normal for each leader to deal bilaterally with China, it’s important to remember the EU’s collective geopolitical might.
“It would be much more efficient and solid if leaders speak one voice,” Nausėda said.
Want more analysis from POLITICO? POLITICO Pro is our premium intelligence service for professionals. From financial services to trade, technology, cybersecurity and more, Pro delivers real time intelligence, deep insight and breaking scoops you need to keep one step ahead. Email [email protected] to request a complimentary trial.