Lithuania selling biscuits to Taiwan is enraging Beijing

Sales of Lithuanian biscuits are soaring in Taiwan.

Not just biscuits, Lithuanian chocolate and beer are also selling better than ever, in some cases by a ten-fold increase in orders. The Taiwanese craving for biscuits and chocolate, washed down with a litre of Volfas Blond, coincides with a diplomatic row between Lithuania and China.

In July, Lithuania allowed the opening of a “representative office” in Vilnius bearing the name “Taiwan” and not, as Beijing demands, “Chinese Taipei”.  For “representative office” read “embassy”, but – whisper it – because few things are more likely to enrage Beijing than recognition of what it regards as a rebellious breakaway region of the People’s Republic. China duly recalled its ambassador to Lithuania, the first time it has done so for an EU member. It told the Baltic state to “immediately rectify its wrong decision, take concrete measures to undo the damage, and not to move further down the wrong path.” Last week, Lithuania’s ambassador to Beijing returned to Vilnius for “consultations”, for which read: “We had to do something in response”.

The Chinese Communist Party’s mouthpiece, Global Times, weighed in, reminding Lithuanians of an old Chinese saying – “Harmony brings wealth”. The director of Renmin University’s Institute of International Affairs, Wang Yiwei, noted: “The buffoon miscalculated China’s economic influence by overestimating itself in a desperate bid to gain more benefits. Lithuania is sacrificing its national interests by cooperating with the unreliable US.”

Lithuania’s stand is bold, reflecting both its history of being occupied by Russia in the Soviet era, and its current “values-based foreign policy” which will defend democracies “from Belarus to Taiwan.” But it’s also economically hazardous. China’s GDP is 260 times that of Lithuania and the Baltic state’s economic strategy is to be a major regional transport hub for rail and waterborne freight, much of which arrives from China. Trade with Beijing was growing, but in recent months China has cancelled freight trains to Lithuania and its approval of export permits for Lithuanian products, such as beef and dairy, has slowed. Paperwork is not being filled in and extra stipulations have appeared on the forms which are sent.

The situation is a new test case for how countries react to Chinese pressure. Only 15 countries in the world dare to officially recognise Taiwan, down from 17 a few years ago after Beijing persuaded Panama and then the Solomon Islands to switch sides. Everyone else sticks with the Chinese mandated formula “Chinese Taipei”. Even the US refers to its de facto embassy in Taiwan as “The American Institute in Taiwan”.

Lithuania shows no signs of backing down and has taken inspiration from Australia’s stance on a different issue. Canberra has taken some severe economic hits over the past year after calling for an independent inquiry into the origins of Covid-19. Beijing has severely restricted imports from Australia and engaged in a war of words with the country. Yet Australia has stood firm on what it regards as a matter of sovereignty and, if anything, the punishment meted out by the Chinese has stiffened its resolve. 

Lithuania, like Australia, needs firm signals that it will be backed by the US in these standoffs. After a call between Foreign Minister Gabrielius Landsbergis and US Secretary of State Antony Blinken, the State Department’s read out of the conversation said: “The highest officials in charge of Lithuanian and US diplomacy said that China’s unilateral actions and political pressure were unacceptable and agreed on bilateral coordination actions in order for Lithuania to withstand China’s coercive pressure. Secretary Blinken underscored ironclad US solidarity with Lithuania and said that the US was proud to have Lithuania as a NATO Ally and EU partner”.

Such statements are music to the ears of the government in Vilnius and are important – but so are biscuit sales, and if they crumble Lithuania will need more than just words.