China is putting pressure on German auto parts manufacturer Continental, urging it to stop using parts made in Lithuania, two informed sources told Reuters.
These actions by Beijing are apparently linked to the diplomatic conflict between Lithuania and China caused by Vilnius’ decision to allow Taiwan to establish a mission in Lithuania, using the word “Taiwan” in its name.
“Ieva Koncevičūte, a representative of Continental’s Lithuanian subsidiary Continental Automotive Lithuania, told BNS that she had learned of the information from the press and declined to comment.
“We do not comment on political issues at the corporate level at all,” she said.
The company “Continental” started its operations in Kaunas district at the end of 2019. The establishment of this plant was the largest foreign investment in production in Lithuania in twenty years.
In April this year, the company started building a second plant in the Kaunas Free Economic Zone worth more than 90 million euros, which is planned to be completed in the spring. The total investment of Continental in Kaunas will reach approximately 185 million euros.
The Continental plant manufactures car door and seat controls and other electronic automotive components.
The Chinese Foreign Ministry denies that Beijing would put pressure on international companies to stop using parts made in Lithuania, but said many Chinese companies no longer trusted Lithuania.
Lithuania’s decision to allow Taiwan to establish a representation in Lithuania under the name “Taiwan” has reportedly angered Beijing as China seeks to prevent any attempt by Taiwan to act as an independent state. Elsewhere in the world, such representations use the name “Taipei” as Taiwan’s capital, in line with Beijing’s “one China” policy, which does not allow Taiwan to be considered a separate country.
In August, China recalled its ambassador to Vilnius for consultations and demanded the recall of the Lithuanian ambassador to Beijing. Lithuanian Ambassador to China Diāna Mickevičiene returned to Lithuania for consultations in early September.
Taiwan’s representative office in Vilnius was opened on November 18, but soon after, China announced that it had lowered the level of diplomatic relations with Lithuania, meaning that the interests of one country would be represented by a lower-ranking diplomat, the Plenipotentiary.
It became known this week that China had recommended that the Lithuanian Embassy in Beijing be renamed the Office of the Plenipotentiary, but that Lithuania had recalled Audru Chapien, the temporary Plenipotentiary of its Embassy in Beijing, while stressing that the move did not close.
The Lithuanian government has also made a formal decision to open a sales office in Taipei, the capital of Taiwan.
Lithuania has criticized the human rights situation in China, blocked its investments, but in May announced that it was withdrawing from the 17 + 1 format of economic and political cooperation, which is mainly in Central and Eastern Europe, because it considers it divisive.
China, on the other hand, has recently begun canceling direct freight train journeys to Lithuania and issuing food export permits, reducing credit limits for Lithuanian companies and raising prices.
Lithuanian businessmen acknowledge that these disagreements have made their cooperation with China significantly more difficult, but the government hopes that closer economic ties with Taiwan could offset these losses over time.
Taiwan and mainland China have been governed separately since the island’s nationalist government, defeated in the Civil War in 1949, and the communist-occupied People’s Republic of China, which considers Taiwan to be part of its territory.
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