Lithuania literally ceased to exist for China. Beijing is taking revenge in Vilnius for its rapprochement with Taiwan and completely blocks imports from the Baltic country, removing it from the list of countries of origin of goods in the customs register, the media report. “China is showing its new economic arsenal,” comments Jakub Jakóbowski from the Center for Eastern Studies.
On Thursday, the website “The Baltic Times” informed that Lithuanian entrepreneurs have been deprived of the possibility of exporting to China, because the Baltic country has been removed from the customs register, so it is impossible to fill in the documents correctly. The reports also reached the Vilnius Ministry of Foreign Affairs, which appealed to the European Commission for help.
The dispute on the Beijing-Vilnius line has clearly worsened after the Taiwan Representative Office was opened in the Baltic country less than a month ago. The authorities of the People’s Republic of China were not so irritated by the creation of an “unofficial embassy” of the Republic of China, as such already exist in many countries of the world, incl. in Poland, but the use of the word “Taiwan” in the name, and not – as usual – Taipei. Beijing considers the island a rebel province and is striving for unification. The vast majority of Taiwanese are against such a move.
In recent weeks, the PRC has lowered the rank of diplomatic relations with Lithuania and stopped issuing visas in the country. Now they are reaching for economic weapons.
As Jeffrey Wilson of the Perth USAsia Center notes, it is not the first time that Beijing has used unofficial trade sanctions as a punishment for “inappropriate” political decisions by other countries. This was the case, for example, in Norway, Japan, South Korea and recently – Australia. However, the Chinese targeted some of the products – Norwegian salmon or Australian coal and wine. “The goal is to undermine trade, not to annihilate it. Not this time,” writes Wilson.
“The removal of Lithuania from the PRC customs declaration system means that the goods cannot actually pass through customs in any direction. 0 exports, 0 imports, nothing. For the commercial purposes of the PRC, Lithuania may very well no longer exist. This is unprecedented. This de-listing is de facto the most serious trade sanction that the PRC can apply. He has never done it before “- says the expert.
Beijing’s reaction may be unprecedented, but it should not be particularly painful for Lithuania, although some entrepreneurs will probably suffer. In 2020, exports from the Baltic country beyond the Wall amounted to only $ 300 million. and accounted for less than one-hundredth of sales abroad. Trade sanctions have often proved ineffective and fairly easy to circumvent in the past, for example by redirecting goods first to one country and, with minor modifications, to their final destination.
“China’s economic war with Lithuania, despite its small scale, is an event on a global scale. Vilnius is aware of its very low economic dependence on China and boldly plays Taiwan’s card in relations with Washington. Beijing, on the other hand, is taking increasingly tougher actions – from calls for joint sanctions with Russia, through the harassment of Lithuanian films, to actions as radical as blocking customs clearance. There is a bit of China’s helplessness in it, because it is difficult for them to press down Lithuania. But this war is also a signal for the rest of our region, but also for the world – China is showing its new economic arsenal “- comments Jakub Jakóbowski from the Center for Eastern Studies.
Experts point out that Beijing’s actions are inconsistent with the rules of the World Trade Organization. This week marks 20 years since the PRC joined the WTO. The Chinese are regularly accused of acting contrary to the rules of the organization, including discriminating against foreign companies and supporting domestic business. WTO membership has been one of the engines driving the growth and development of the Middle Kingdom in the last two decades, contributing to the inclusion of the country beyond the Wall in global supply chains.