How little Lithuania dragged the EU into its

showdown with China

The country isn’t the first to tangle with Beijing — but it’s unusual in that Vilnius has little to lose
from the spat.

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.

Lithuanian Foreign Minister Gabrielius Landsbergis (left) meets U.S. Secretary of State Antony
Blinken in Washington on September 15, 2021 | Pool photo by Mandel Ngan/AFP via Getty
Images

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."

Lithuanian President Gitanas Nausėda | Pool photo by Olivier Hoslet/AFP via Getty Images

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.

In 2000 Li Peng, then chairman of the National People’s Congress standing committee, cut short
a two-day visit to Lithuania after discovering parliament had organized an international meeting
on the crimes of communism | Petras Malukas/JS/BW/EPA
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.

The country has also donated COVID-19 vaccines to Taiwan, offered humanitarian visas to Hong
Kongers and sounded the alarm on security risks regarding Chinese-made Xiaomi mobile phones.

"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.