In retaliation against Lithuania for allowing Taiwan to set up an office in Vilnius, China pressured a German multinational auto parts company to stop using Lithuanian-made parts.
This is an exclusive report issued by Reuters on Friday (December 17). The report quoted two people familiar with the matter as saying that the German company under pressure from China is the auto parts giant Continental Group (CONG.DE).
Continental is one of the world’s largest auto parts manufacturers, and its customers include all major German automakers. Continental has a factory in Lithuania that produces electronic components such as door and seat controllers, and exports them to global customers including China.
The Lithuanian government allowed the Taiwan authorities to establish a “Taiwan Representative Office in Lithuania” last month. Beijing was very angry about this and immediately announced that it would downgrade the diplomatic relations between the two countries to the charge d’affaires level, and the relations between the two countries have deteriorated seriously.
The Chinese Ministry of Foreign Affairs claimed that Lithuania’s “one China, one Taiwan” approach seriously interfered with China’s internal affairs and seriously violated China’s core interests.
The spokesperson also said: “I heard that many Chinese companies no longer regard Lithuania as a trustworthy partner. Lithuanian companies encounter difficulties in developing economic and trade cooperation in China, and Lithuania must examine itself.”
There was news last week that China has asked multinational companies to cut off ties with Lithuania, otherwise they will be shut out of the Chinese market. The Lithuania Confederation of Industrialists, which represents thousands of Lithuanian companies, confirmed that some multinational companies that purchase goods from Lithuanian suppliers have become China’s targets.
The Chinese Ministry of Foreign Affairs denies that Beijing has pressured multinational companies to not use Lithuanian parts.
Lithuania’s direct trade with China is not large, but hundreds of companies provide furniture, laser products, food and clothing to multinational companies selling in China.
The Ministry of Foreign Affairs of Lithuania stated: “Companies operating in Lithuania have successfully integrated into the international supply chain, so China’s economic pressure measures may cause various disturbances to companies operating in Lithuania.”
A spokesperson for the Lithuanian Ministry of Foreign Affairs said: “We will closely monitor, analyze and evaluate such cases, including these German companies.” He added that they are “looking for long-term sustainable solutions and ways to restore trade flows with China.”
The European Commission said on Friday that if evidence of Beijing’s violation of international trade rules is found, the EU may submit a trade dispute between China and Lithuania to the World Trade Organization (WTO).
A spokesperson for the European Commission said: “In order to file a complaint in the WTO, we need to have enough evidence, so we are actually doing this now.” He also said that the European Commission is working with Lithuania and other member states that may face similar problems. Contact with the authorities.
(This article is based on Reuters reports)
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