China has been engaged in a major diplomatic row with Lithuania for the past two months over Taiwan’s representative office carrying the moniker “Taiwan” instead of “Taipei,” the name China insists upon to maintain formal diplomatic ties with other countries.
China objects to the nation calling itself “Taiwan” because it challenges its narrative that there is only “one China,” which by default means not recognizing Taiwan.
The China-Lithuania spat is being closely watched by the democratic world, which sees China as a bully that intimidates smaller and weaker states through strong-arm tactics, keeping pressure on states maintaining informal ties with Taiwan and deterring any country departing from the “one China” course.
Lithuania’s action was seen as a red flag by China’s snorting bulls, who felt that this could set a precedent, encouraging other nations to emulate Lithuania’s action and upgrade their ties with Taiwan.
The spat took an ugly turn when China threatened foreign companies with stern measures if they purchased parts or services from Lithuanian manufacturers or service providers. This has alarmed many multinational companies that have had ties with Lithuania, where they have been producing parts for products that are exported to China.
The case of the German multinational Continental illustrates the disruption China’s decision is causing to foreign suppliers. A manufacturer of auto parts produced in Lithuania, Continental faces China’s ire if it continues to source from Lithuania for products it supplies to China.
In an age of globalization and international supply chains — in which multinational firms manufacture parts and components in different parts of the world, and to take advantage of low wages, availability of raw materials or human resources, geographic proximity to manufacturing companies and so on — China’s attitude is finding no sympathizers and is further mauling its already dented international image.
Indeed, the free world is appalled by China’s conduct. Large corporations, having their own global supply chains, wonder if their unchecked dependence on China’s market would hurt if there is political disagreement between China and any state with which they have business interests.
China has also threatened to block some lucrative imports from Lithuania. Indeed, it threatened to block a large shipment of more than 20,000 bottles of dark rum made in Lithuania by the country’s MV Group Production. It was only after Taiwan Tobacco and Liquor bought the entire shipment on Dec. 18 that Lithuanians breathed a sigh of relief and praised Taiwan for the effort.
China’s strong-arm tactics have included downgrading its embassy in Lithuania to the charge d’affaires level, reducing the operations of the Lithuanian Embassy to a bare minimum.
The free world is also confronted with a moral question that has long-term geopolitical implications touching the core values of democratic societies.
Democratic nations ask whether they should continue to reap the good business harvest with China and ignore its severe human rights violations in Xinjiang, Tibet and Hong Kong. Many in Canada, the US, Germany, France and Japan fear that if such transgressions are not checked with stern retaliatory measures, China would be emboldened to commit other serious transgressions, and even take the calculated risk of an outright invasion of Taiwan.
Be that as it may, the free world needs to show unity and resoluteness in its stand.
China is trying to “punish” Lithuania for breaking the cardinal “one China” principle. Lithuanian diplomats and their dependants posted in China have been leaving after they were told to surrender their diplomatic status, giving rise to fears that China could strip them of diplomatic immunity. EU member states are reportedly working to find a solution to this crisis, sources in Brussels have said.
However, China’s actions could also provoke counter-action. For instance, Lithuania is said to be putting less emphasis on the so-called 17+1 group, which brings together China and 17 central and eastern European countries.
Indeed, the Lithuanian parliament’s Committee on Foreign Affairs has reportedly urged the Lithuanian government to leave the 17+1 group completely. Lithuanian Minister of Foreign Affairs Gabrielius Landsbergis said that the group had brought Lithuania “almost no benefits” and was “not useful for Europe.”
However, he said he was not suggesting that Lithuania was leaving the group.
“[We will] consider what is the useful way of building a relationship with China,” he said.
Indeed, Lithuania was one of six European countries that did not send a head of state or government to the recent 17+1 summit. Their absences were conspicuous to China, even though this year’s meeting was virtual.
For many European states, the 17+1 group has not produced any substantial economic benefits, even though they continue half-heartedly to be members and show only bare minimum interest.
Baltic countries have had the bitter experience of suffering repression and human rights contraventions under the former Soviet Union. These states perceive China to be ruled by a repressive regime that stirs negative sentiments in the EU, particularly among the Baltic states.
If other countries followed Lithuania’s example and upgraded ties with Taiwan, by allowing the Asian nation to use the name “Taiwan” in official capacities, it could erode China’s international standing. Would China retaliate by “punishing” all of them?
Imposing sanctions against Lithuania is one thing, but it is another to impose sanctions collectively against several countries for allowing Taiwan to call itself by its proper nomenclature rather than using “Taipei.”
China could alienate itself in the international arena and also face economic sanctions. China might be a huge market, but it is also the world’s largest exporter, and its major markets are largely democratically governed countries. If these countries retaliated by restricting or boycotting Chinese products, China could face serious economic and social consequences.
The spat with Lithuania only further dents China’s image in the international arena.
Manik Mehta is a New York-based journalist who writes on foreign affairs, diplomacy, global trade and economics.
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