Lithuanian playing “Taiwan card” brings (un)intended (un)certainties for the future of Sino-Lithuanian relations: a Chinese perspective

Among 2020 Tokyo Olympics US-China medal race, US Congress demanding independent “Wuhan virus” investigation, 2022 Beijing WO boycott controversy, one “big game” news that recently made headlines in Chinese state media arrived from CEE. In early August, Lithuanian government agreed with Taiwanese officials to mutually open “representative offices” in Vilnius and Taipei to bolster bilateral economic cooperation and strengthen regional presence. For Beijing this is not very pleasing news, but it is far from controversial, considering the number of representative or trade offices, de facto embassies, Taipei has established around the world. Except Southeast European countries, every European region has a capital with Taipei representative office. It would probably slipped off the media limelight, if another “Taipei Representative Office” is to be opened in Vilnius. However, Lithuanian government announced opening of a “Taiwanese Representative Office”, making significant diplomatic incident that angered Beijing, which perceives any official designation other than “(Chinese) Taipei” as a lending the island a sense of international legitimacy and a blatant violation of the One China principle. In an immediate response, China recalled its ambassador in Lithuania, urging Vilnius to do the same – a rare move in modern Chinese diplomatic history and token how serious the incident is viewed in Beijing.

Recently, there were growing signs of discontent with Chinese foreign policy initiatives within CEE, some of the countries made bolder moves in accusing Beijing for backdoor divide et impera tactics, a few have decided to “play Taiwan card”, seeking closer economic relations with Taiwan while simultaneously paying a lip service to “shared values”. Lithuanian northern neighbor, Latvia agreed to open Taipei Representative Office, Czech Foreign Minister during his visit to Taipei in September 2020 walked a thin line trying not to offend Beijing in procuring economic benefits from Taipei. The Lithuanian announcement came as a most radical departure from “spirit of communique” China signs with most of countries upon the establishment of diplomatic relations, which sets principles in conducting bilateral relations and which are called into question when a country is seriously damaging China's sovereignty and territorial integrity. According to China’s Ministry of Foreign Affairs’ statement, such is the case right now.

Lithuania, a former Soviet Republic, NATO and EU member like Estonia and Latvia due to growing fears about Russia’s encroachments has developed high security dependence on the United States and strong bipolarization in its foreign policy, which together with other two Baltic countries tries to follow closely pro-American security policy while pursuing a tough stance towards their eastern neighbor. The Baltic countries, Poland and the rest of CEE (in this order) regard Russia as their major security problem. Following the Crimea’s annexation, continuation of the frozen conflict in eastern Ukraine and recent diplomatic spats with Belarus, Lithuania and other countries are increasingly worried about Russia’s intentions to restore the sphere of influence over the former Soviet Union, and their security reliance on NATO and the United States has increased unabated. Before the US-Chinese tensions, Lithuania’s China policy was relatively pragmatic and cooperation-minded, not much outstanding in terms of trade and investment, but enjoying stable bilateral development with China. Soon as Trump initiated more overt strategic competition against China, Lithuania played along, supporting the “clean (5G) network” campaign launched by the United States. Bipolar strategic thinking spilled over Lithuanian China policy more openly in February 2019 after the Lithuanian security agency’s report called China a “national security threat”. Few months later, in July 2019, President Nauseda publicly opposed Chinese investment in the modernization of Klaipeda port, saying it “may threaten Lithuania’s national security”. In October 2020, after Homeland Union-Christian Democrats led coalition came to power, Lithuania’s China policy turned more radical, pioneering the criticism against China and balking against its foreign policy initiatives in the region. In February 2021, the Parliament passed the resolution on withdrawal from the China-CEE (known also as 17+1) cooperation mechanism. On May 20, the Legislative Assembly passed a resolution on the Xinjiang issue. In June, FM Landsbergis announced formal withdrawal from “17+1”, and on July 20, started talks with Taipei on setting up a “representative office” in Vilnius.

In explaining Lithuanian move, Chinese experts believe it reflects Taipei’s diplomatic offensive following COVID-19 outbreak (internationally unrecognized Somaliland has opened “Taiwanese Representative Office” a year ago), and continuation of Beijing-critical attitude of the current Lithuanian government, but a few doubt that “rushing to the frontline of anti-China campaign” is not strongly backed by Washington.

Why rushing to the frontline?

First, after the Biden administration increased the pressure on European countries “to choose sides” in some cooperation areas, a small, dependent and “black and white” strategic thinking prone allies are bound to first give in. Zhao Huirong, a researcher at the Russian Institute of Eastern Europe and Central Asia of the Chinese Academy of Social Sciences, believes that precisely because of this pressure Lithuanian politicians started to carry out “diplomacy of values” and call China a “security threat”. Second, a certain pre-emptive coordination on the Lithuanian side cannot be excluded. Trump administration gradually shifted cooperation focus to CEE due to persistent dissonances over military spending and trade negotiations with Western Europe, resulting in strengthening military deployment in Poland, Romania and the Baltic countries, and enhancing all-round support for CEE’s security concerns over non-Western influences. Biden’s first diplomatic move, on the other hand, was to restore coordination and cooperation with France, Germany and other Western European powers. CEE was given less attention in Washington, at least halfhearted commitment to the “Three Seas Initiative” (3SI), and disagreements on key issues such as “Nord Stream-2” would indicate that Trump era CEE-US “honeymoon” period is over. Yang Bowen, an expert at the China School of International Studies, believes that Lithuania volunteered to play the “Taiwan card” (da Taiwan pai) in order to get into the US strategic focus and “trying to urge the United States to pay attention to its needs”.

Third, dissatisfaction with participation in “17+1” and Chinese foreign policy initiatives and bilateral cooperation with China among Lithuanian leaders. Different attitudes towards bilateral and multilateral cooperation with China exist since the establishment of the “17+1” mechanism. As mentioned in the previous report (“Resilience and inertia of small countries”), winners, aspiring participants and cooperation laggards, each according its strengths and needs advanced bilateral trade and investment potentials with China. Cooperation laggards tend to be segmented among smaller and more security-dependent participants, but this designation had only transitory significance, while prospects of continued participation in Chinese cooperation frameworks exceeded temporary misgivings. However, some countries prematurely accepted “laggard” fate, some decided to bet on securitization of the Chinese influence claiming that China is biased towards cooperation winners, pays limited attention to constructive criticism arriving from some participant countries and is not committed for a more norm-based framework. Yang Bowen said that these views expose the shortsightedness and prejudice of Lithuanian politicians, impressed with seemingly unsurmountable cooperation challenges, such as huge trade deficit with China and less competitive strategies to attract Chinese investment.

Is it going to impact China EU and China-CEE cooperation?

Chinese experts believe that this “anti-China act” (fanhua xingjing) probably would not incite any same-minded follow ups in Europe or in CEE, leaving Vilnius to fully bear consequences on infringing on China’s interests and violating the principles of Sino-Lithuanian cooperation. Some speculations agree that the act may attract the attention of the United States in the short term, but considering the reemphasized Indo-Pacific focus of Washington’s foreign policy and probable concessions it might require in maintaining triangular balance, i.e. stabilizing Russia to strengthen strategic competition with China, Lithuania is probably soon to realize it “miscalculated gains and losses” in the long run.

As for the China-CEE (17+1) cooperation mechanism, the recent online summit held in February this year stressed the pragmatic orientation of cooperation. China set out a plan to double agricultural imports from CEE countries in the next five years, targeted amount reaching up to 170 billion USD and increase of China-CEE agricultural trade by 50%. This is only a piece of overall cooperation volume between China and CEE countries currently or previously realized, for which minimum requirement is continuation of stable and relations based on mutual respect. Zhao Huirong, in this sense, believes the consequences of this particular teacup “Lixit” are likewise small, since Lithuania had limited impact on the cooperation mechanism and in the overall cooperation. According to the data of China’s Ministry of Commerce, last year, the trade volume between China and CEE countries exceeded 100 billion USD, of which the trade volume with Lithuania accounted for less than 2%.

Yang Bowen believes that freezing of Sino-Lithuanian relations will not have a substantive impact on China EU relations either. First, Lithuania's economic, social and political impact in Europe is limited, which can be substantiated with relative yawn given to the recent Sino-Lithuanian tension in the media across CEE. Second, other European countries have different views and positions regarding the cooperation with China and will not easily follow suit. Most CEE and core EU countries rather seek balance among major powers and have no intention of harming cooperative relations with China. Finally, Lithuania’s unilateral announcement to withdraw from the “17+1” and playing “Taiwan card” is completely unilateral, not directly provoked by China, therefore, it might pay additional collateral cost for spearheading (unsuccessful) “anti-China” domino effect in the region.