Taiwan is setting up a $ 200 million fund to invest in Lithuania and aims to take as much of the Baltic country’s goods banned by China as possible, as Taipei tries to reward Vilnius for its diplomatic support.
Eric Huang, head of Taiwan’s representative office in Lithuania, said on Wednesday that he hopes to make his first investment later this year with the money guaranteed by his national development fund. “It is time for us to help you with your problems,” Harry Ho-jen Tseng, Taiwan’s Deputy Foreign Minister, told Lithuania.
Vilnius agreed last year to have Taiwan open a representative office – a de facto embassy – in its own name, rather than under the name of its capital Taipei as many other European countries did. Beijing, which claims Taiwan as part of China and is trying to force other governments to treat it as such, has since experienced a wave of diplomatic and economic sanctions against Vilnius.
Beijing withdrew its ambassador from Vilnius, banned Lithuanian imports and put pressure on foreign manufacturers to stop using Lithuanian components. The Baltic country was also forced to vacate his remaining diplomats from China over fears for their security.
Whether Lithuania stands firm or receives the full support of other EU member states has become a test case for the effectiveness of China’s economic and political coercive tactics.
Lithuanian President Gitanas Nauseda recently reversed his earlier view and said it was a “error“To make the representative office in Taiwan’s name, not Taipei’s. He also complained the decision was not coordinated with him by the government, led by Prime Minister Ingrida Simonyte, whom he defeated in the 2019 presidential election.
The struggle has led officials to worry that Lithuania’s message is in danger of being diluted, as the president represents the country at EU summits and often takes the lead on foreign policy issues.
Simonyte said on Wednesday she was “disappointed” with Nauseda’s remarks and that he had endorsed the move for months since the announcement.
Radvile Morkunaite-Mikuleniene, deputy chairman of Lithuania’s parliament and deputy head of the ruling Homeland Union party, told the Financial Times on Wednesday that the government was sticking to its guns and would not change the name of the representative office.
“It is important for the international community to understand the position on foreign affairs. We are not withdrawing from our position, “she said.
Lithuania was shocked by the force of China’s response. Not only did it stop Lithuanian imports, but it also put pressure on other European manufacturers, such as the German car parts manufacturer Continental, not to use Lithuanian components in its Chinese operations.
Building economic ties has been a major focus for Taipei since it began expanding relations with Lithuania last year. Kung Ming-hsin, minister of the National Development Council overseeing the national development fund, led a delegation to Lithuania in late October, saying he expected the country to be a focal point of Taipei’s hub to Central and Eastern Europe.
But in light of China’s sanctions, Taipei feels compelled to make up for some of the economic damage Vilnius is suffering. “Originally, it had nothing to do with a competition between us and Beijing, and it should not be a zero-sum game,” said a senior Taiwanese government official.
A senior Taiwanese foreign policy official said: “We want to ensure that China’s economic coercion against Lithuania will be offset by our efforts in trade and investment.”
State-owned Taiwan Tobacco and Liquor Corporation on Monday seized a shipment of 24,000 bottles of Lithuanian rum rejected by Chinese customs. Huang said on Wednesday that Taiwan had exported 120 Lithuanian shipping containers that had been blocked by China.
The Taiwanese representative said he expected the priority investment areas for the new fund to include semiconductors, lasers and biotechnology. Taiwan has previously also identified financial technology as a possible area of cooperation, and Vilnius has more regulated fintech companies than any other EU country.