Linas Jegelevičius
Lithuanian politicians who assumed a bellicose stance towards China fail to heed local business interests and furthermore – make then uncompetitive, says Arūnas Laurinaitis, vice president of the Confederation of Lithuanian Industrialists (LPK).
According to him, Lithuania, having razzed China, will be the only one left without cheap raw materials.
He insists that Lithuania’s China policy has dealt a strong blow to the competitiveness of Lithuanian companies and businesses.
“The loss of China, I could say, has pushed Lithuanian business outside the EU’s competitiveness limits, because Lithuania is the only one that now does not have direct access to the Chinese markets. Lithuanian business uses companies from Poland, Latvia, and other countries in order to get materials,” the LPK executive told delfi.lt
In his words, with an economic crisis looming around the corner,
the fallout from strained relations with China will additionally exacerbate the situation.
Agreeing, speaking to BNN, Sigitas Besagirskas, President of the Vilnius Association of Industry and Business (VAIB), said that the consequences from the complication of Lithuania-China relations have been painful and tangible for Lithuanian business.
“The volume of trade we have now with Taiwan and the other countries in Asia and the potential there will never outweigh the volume of trade we had and could potentially have with China,” Besagirskas told BNN.
And those who decided to halt the exports, sold their goods cheaply to the other countries in the region, relatively close to China, like Australia, for example, with which our trade, not surprisingly, sees a tangible uptick lately,” the VAIB head emphasized.
Relations between Lithuania and China turned sour after Vilnius allowed Taipei to open its representative office with the word “Taiwanese”, rather than “Taipei’s”, in its name in 2021.
Kęstutis Girnius, a prominent Lithuanian political analyst of American descent, has told BNN that one-sided recognition of Taiwan by allowing it to open a Taiwanese representative office in Vilnius in 2021 has been a mistake, as the decision was not coordinated with the European Union and no other EU county followed in our footsteps.
In response, China cut down diplomatic and economic ties with Lithuania,
prompting the European Commission to launch a case at the World Trade Organization against China over its discriminatory trade practices against Lithuania over its stance on Taiwan.
The political narrative of China has been trending the agendas of both Lithuanian policymakers in Vilnius and the euro parliamentarians in Brussels.
Met in the EP parliamentary session in Strasbourg, France, Lithuanian MEP Rasa Juknevičienė told BNN that the Western countries ought not to repeat the mistakes made with Russia when dealing with China.
“For years in Europe, we have been thinking that economic cooperation (between the EU and China – L. J.) would prompt dictators to support the rules-based international order. However, it appears to have been very wishful thinking that failed. We chose not to see the threat of Russian aggression, and now we are choosing not to see the threat of Chinese aggression. We are on the verge of repeating the same mistake,” the MEP underscored.
The European Parliament on April 18 discussed the European Union’s (EU) response to the growing global challenges stemming from a more repressive and assertive China.
Juchnevičienė was one of the very fiercest critics of China in the debate. Meanwhile, the European Commission Vice President, Valdis Dombrovskis, took a more lenient stance on China, saying that the EU’s relationship with China is about “better risk management” and more “diversification”.
Lithuanian Foreign Minister Gabrielius Landsbergis has recently said that
having preferred economic ties over policies and politics, the EU and the West “fed” the authoritarian economies
while letting them break all the rules.
“China is betting that we will repeat this mistake…Instead of requesting assistance, we should be projecting our strengths, showing the world that Ukraine, Europe, and the US are willing and able to secure the European continent. That is the only signal we should be sending,” he tweeted recently.
However, the vice president of the Confederation of Lithuanian Industrialists (LPK) exhorts to show more rationale and insightfulness when dealing with China.
“Meaning, geopolitical tension is one thing, but the economic survival issue is the other…China is a huge market in terms of export and import,” Laurinaitis said.
The representative of industrialists emphasizes that last year, there was still a certain acceleration of business, which led to high economic indicators. However, this year, according to him, the situation is getting much worse.
“If we look at the trends of the first quarter of this year, they are negative and falling. Last year, the business still had contacts sufficiently, and there were orders 6-9 months ahead. Now – only up to 3 months,” he said.
According to him, the Lithuanian industry “clearly identifies” that it does not have enough safeguards to be competitive, “because there is a rise in interest rates, and, besides them, the economy is faced with decreased access to competitive raw materials and materials…When the half-year term comes, I think there will be no room for great joy,” Laurinaitis said, adding that politicians of all other EU countries realise that “China is the biggest factory in the world with various materials”.
“Although they have previously talked about the need to reduce dependence on Chinese resources and production, one after another they go to the Far East to make money with large delegations of businessmen,” Laurinaitis said, referring to the recent visit of the French president Emmanuel Macron to China.
However, downplaying China’s importance, Lithuanian MP Matas Maldeikis says that
the situation of Lithuanian industrialists is not as bad as Laurinaitis paints it.
“Last year, Lithuania exported as much as ever. In fact, our exports were higher…If we talk about Macron, he wants, first of all, to ramp up his position, domestically and internationally. On his China visit, the president of the European Commission (Ursula von der Leyen – L. J.), speaking figuratively, was left sitting in the back seat, thus, Macron’s position alienates the EU from the US on its position on China,” the MP says.
Previously, Vidmantas Janulevičius, president of the Lithuanian Confederation of Industrialists (LPK), has said that China’s stance towards Lithuanian companies has been softening and that the business possibilities with Taiwan are auspicious.
Earlier this year, Lithuania’s IoT solution provider Teltonika IoT Group, high-tech solar module maker SoliTek of Global BOD Group, and biotechnology start-up Oxipit signed 14-million-euro-worth agreements on joint projects with Taiwan. Under the agreement, Teltonika will acquire the right to use the licences for semiconductor chip manufacturing technologies and devices developed by the Taiwanese institute.
As agreed, Taiwan’s Foreign Ministry will contribute 10 million euros to the agreement, with the remaining 4 million euros coming from Teltonika. The semiconductor projects are scheduled to be completed by 2027.
But afore-mentioned Besagirskas has called the sums “insignificant”, saying that they will not expand noticeably in the foreseeable future and that sour relations with China will continue dampening Lithuanian business interests. Also, at least in the near future.
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