The diplomatic spat between Vilnius and Beijing over Lithuania’s ties with Taiwan is hurting the country’s tech industry. Sector representatives say that unless the situation changes, firms may need to relocate elsewhere.
“The situation has finally become clear. The foreign minister has said quite bluntly that the situation with China and the European Union will not change,” Kristijonas Vizbaras, a co-founder of the laser manufacturing company Brolis Group, said after the meeting at the Presidential Palace on January 19.
“So, technically, we have been sacrificed for this “value-based” policy,” he added.
The meeting to discuss the resilience of the Lithuanian economy in the wake of Beijing’s unofficial economic sanctions against Lithuania was convened by President Gitanas Nauseda.
According to Vizbaras, if the situation does not change, Lithuanian technology companies might soon be forced to expand elsewhere.
“What already exists in Lithuania will stay here. But we need to increase production to be able to participate in global supply chains,” the businessman said.
“What remains in Lithuania will serve some niche purposes where it is possible to avoid China’s direct or indirect involvement,” he added.
When asked whether the aid mechanisms, currently being coordinated with the EU, would compensate for the loss of the Chinese market, Vizbaras said that compensation was not his company’s goal.
“It’s not about support measures. It’s about being able to do business and sell,” he said.
“In the automotive or laser sectors we cannot ignore the fact that China dominates global supply chains. That is not our choice. That is just the way it is,” Vizbaras added. “If we cannot sell our products, our components, then we cannot do business in this geographical location.”
After the meeting on January 19, Nauseda said he was ready to initiate changes to the corporate income tax and other support measures for businesses affected by China’s actions.
Lithuania has angered China by allowing Taiwan to open a representative office in Vilnius under its name.
Amid the Vilnius-Beijing diplomatic row, Lithuania’s businesses have complained of various restrictions in trade with China.
According to media reports, China has also been pressuring international companies to drop their Lithuanian suppliers. (LRT/Business World Magazine)