On January 17, Lithuanian Economy and Innovation Minister Ausrine Armonaite said the country was concerned about foreign investors changing plans due to China’s pressure.
“We have no further information about companies changing their plans. There is concern, and everybody hopes that the situation will de-escalate and will be resolved, which is what we expect as well,” the minister said during an event co-hosted by her ministry and Invest Lithuania, the government’s foreign investment promotion agency.
“Recent developments have not contributed to the attractiveness of the investment environment,” Armonaite said, referring to China’s unofficial sanctions imposed on Lithuanian businesses in the wake of a Taiwanese trade office opening in Vilnius last autumn.
“But we hope that this will be an incentive for Lithuania to make decisions, for example, on how to attract talent and some other decisions on the business environment,” she added.
In December last year, China pressured Germany’s car parts giant Continental to stop using components made in its Lithuanian plant.
Recently, Elijus Civilis, head of Invest Lithuania, has said some 40% of surveyed Lithuanian companies are experiencing difficulties due to China’s sanctions. He admitted that foreign investors preferred politically stable countries, meaning that Lithuania might lose some of its competitive edge to neighbouring countries.
Lithuania has angered China by allowing Taiwan to open its representative office in Vilnius under the name “Taiwanese” instead of “Taipei”.
In retaliation, China last autumn halted freight trains to Lithuania, stopped issuing food export permits, cut credit limits and raised prices for Lithuanian companies and removed Lithuania from its customs systems, meaning that Lithuanian goods could not clear customs. (LRT/Business World Magazine)