Tiny Lithuania Could Change How The World Handles China

For a full year, China has subjected Lithuania to unprecedented pressure for refusing to toe Beijing's line on issues like Taiwan. With U.S. help, Lithuania is resisting — and offering a model.
Illustration: HuffPost

VILNIUS, Lithuania — Nestled between highlands and an icy coast in northeastern Europe, Lithuania resisted Christianity for longer than any other nation on the continent. The Lithuanians finally converted in 1387 as part of a grand geostrategic bargain — then used the deal to expand their influence over thousands of miles of territory between the Baltic Sea and the Black Sea in the south. Centuries later, Lithuania became the first state to leave the crumbling Soviet Union.

Now the West Virginia-sized country is asserting its independence from the rising power of the 21st century: China.

Lithuania is refusing Chinese demands to curtail its deepening relationship with Taiwan, the self-ruled island that Beijing treats as a breakaway province, and urging other European countries to reconsider the continent’s reliance on the Chinese economy. China sees Lithuania’s stand as an offensive and inappropriate gambit by a minor player that deserves a sharp response to keep other nations in check. So for an entire year, Beijing has been pressuring Lithuania by cutting off trade, making Lithuanian officials fear for their lives and urging third parties to kneecap the Lithuanian economy.

For many European and American officials and top foreign policy experts, the spat is a crucial test case for democratic countries’ changing relationship with the increasingly autocratic Chinese President Xi Jinping. What behavior does Xi see as crossing his red lines, and how far will he respect the sovereignty of smaller nations? Can China force other major powers to flout their stated values and alliances? And what is the best response to this kind of Chinese campaign?

“This time, it’s Lithuania. The next time it can be anyone else,” Lithuanian Deputy Foreign Minister Jovita Neliupšienė told HuffPost this fall.

Lithuanian pushback to China’s vision for world order dates back years. In 2019, Chinese diplomats and allied protesters clashed with pro-Hong Kong demonstrators in the capital, Vilnius, spurring public outrage. The following year, Lithuania’s then-foreign minister said Taiwan should join global consultations about COVID-19, and 200 notable Lithuanians publicly demanded closer Lithuania-Taiwan relations. And in 2021, Lithuania exited a Chinese-led forum for smaller European states, saying it preferred European Union-level conversations that include powerhouses like France and Germany, then spread the alarm about a censorship mechanism inside Chinese-made phones.

But the relationship truly collapsed after Nov. 18, 2021, when Taiwan opened a mission in Vilnius that it named “The Taiwanese Representative Office in Lithuania.” Lithuania said it had the right to permit the office, and Taiwan had the right to choose its name; sensing a supportive environment, Taiwan used the term “Taiwanese” rather than the “Taipei” it uses elsewhere.

Lithuania insisted that it did not recognize Taiwanese independence. Many countries — including the U.S. — host Taiwanese offices while acknowledging that there is only one Chinese government. China disagreed, downgrading relations and retaliating against Lithuanian companies. Soon afterward, an essay in the Chinese Communist Party outlet Global Times argued that Lithuania lacked “moral ground” and, without a reversal, would “only face a path where it will feel more pain.”

“Anyway, it is not that important for China whether Lithuania will wake up from its illusions sooner or later,” the op-ed continued. But the scale of Beijing’s response and Chinese sensitivity about any parallels with the Soviet collapse suggest that China cares more than a little.

So do most global players. Amid the dispute, Taiwan pledged unprecedented investment worth more than $1 billion to Central and Eastern Europe. On Nov. 7, it said it would invest $10 million in chip production — a strategic and fast-growing business — in Lithuania, as well as $3.5 million in the country’s prized laser industry.

The U.S. had to intervene in “a David and Goliath situation,” said Jose Fernandez, the top economic official at the State Department. The Biden administration provided Lithuania with $600 million in credits to boost its exports and has vocally supported the NATO ally, prompting complaints from Beijing.

U.S. Secretary of State Antony Blinken (R) poses with Lithuania's Foreign Minister Gabrielius Landsbergis in the Benjamin Franklin Room of the State Department ahead of a meeting in Washington, D.C., on Sept. 15, 2021.
U.S. Secretary of State Antony Blinken (R) poses with Lithuania's Foreign Minister Gabrielius Landsbergis in the Benjamin Franklin Room of the State Department ahead of a meeting in Washington, D.C., on Sept. 15, 2021.
Photo by MANDEL NGAN/POOL/AFP via Getty Images

Along with China policy, the situation could shape how countries see Washington and President Joe Biden, who frequently promises to defend global democracy against authoritarianism.

As the confrontation has dragged on, Fernandez said, “other nations are coming to us to discuss, unprompted, actions that they are considering that are well within their sovereign rights, but they are afraid may trigger blowback from Beijing. They ask us, ‘Will you support [us] in the same way you supported Lithuania?’”

To Biden’s team, “that other nations look at Lithuania and see it as a success is a measure of success,” Fernandez told HuffPost.

After disruptions and domestic dissent in Lithuania, there is growing evidence the crisis will end in a way that reflects well on democratic principles and deters future Chinese bullying — a battle won in the broader war that Biden talks about.

The E.U.’s quick and united support for Lithuania is a big reason for hope, officials working on the policy say. The union is pursuing a suit on Lithuania’s behalf at the World Trade Organization and it is expected to soon adopt a new mechanism to fight future economic coercion.

“Before the launch of this case, a lot of people — not only in Lithuania but also other countries — think you should not irritate China. Since the launch of the case, the world clearly sees it’s China that violates the law. This is a very important change of narrative,” said Eric Huang, the head of the Taiwanese office in Vilnius.

The vicious ongoing Russian invasion of Ukraine also reshaped European thinking, he noted.

“After that, they realize that geographically we are distant, but actually we are interconnected,” said Huang, whose homeland frequently faces invasion threats from China. “European countries now realize that they cannot be over-dependent on an authoritarian country.”

‘A Political Fungus’

The price of Lithuania’s pluckiness became clear very soon.

Days after the Taiwanese office opened in Vilnius, China stopped treating Lithuania as a fellow country.

At Chinese ports, officials told cargo ships that had traveled for months that they could not unload Lithuanian goods because Lithuania did not exist in China’s customs database. Baidu, the mapping service used by Chinese taxis, displayed a new low-ranking title for Lithuania’s embassy in Beijing. And the Chinese foreign ministry told the embassy staff and their families — 19 people, including children — to return their IDs, leaving them without any legal status in China.

“Their very existence became so precarious… that we became worried about their safety,” said Diana Mickevičienė, Lithuania’s ambassador to China at the time.

Chinese authorities had expelled Mickevičienė months earlier following the announcement of the Taiwanese office plan. In Vilnius, she and her team tried to negotiate but received no Chinese response to three official diplomatic communications. Once they decided they had no choice but to bring their colleagues home, the only bookings available were scheduled for after the embassy staff would lose their IDs. Lithuania’s worried government asked other nations’ diplomats to be with the fleeing team “until their last second” in China on Dec. 16, Mickevičienė told HuffPost.

The defunct Lithuanian embassy in China's capital of Beijing.
The defunct Lithuanian embassy in China's capital of Beijing.
via Associated Press

Meanwhile, Lithuanian officials were scrambling to help companies deal with millions of dollars worth of merchandise floating in the Pacific without buyers. Beyond that possible loss, the potentially staggering cost to Lithuanian businesses would include paying for storage at Chinese ports. Leaning on democratic allies was the country’s ultimate solution, according to Neliupšienė, who was then Lithuania’s deputy economy minister. Japan, Taiwan and South Korea bought many of the goods.

“One of the lessons we learned is that doing business with authoritarian regimes where decision-making is not based on a market economy, on the rule of law, is always a risk,” Neliupšienė said.

China made its fury clear back in Europe, too.

Beijing downgraded its Vilnius embassy to an office for a chargé d’affaires, the diplomatic rank below ambassador. China implemented the change with the speed of a one-party state — but it befuddled Lithuania, which does not have a legal framework for such an office and where parliament would need months of debate to pass a law creating the new classification.

Chinese officials began telling multinational companies to choose between doing business with China or Lithuania.

From an economic point of view, the choice for these companies was clear. Morally and politically, major international principles were suddenly in question: sovereignty and the E.U.’s promise that its members behave as a single market, the basis of European global power.

As China stopped exporting some components to factories in Lithuania, German businesses with big operations there urged Lithuanian officials to back down, Reuters revealed.

By January, a survey commissioned by Lithuania’s foreign ministry found that 60% of the country opposed the government’s China policy. Gitanas Nausėda, the country’s president, publicly said the approach to opening the Taiwanese office failed to involve appropriate consultations.

Lithuania’s ruling conservatives faced skepticism both domestically and internationally.

“What does the country get from breaking relations with China?” said Vida Mačikėnaitė, a Lithuanian professor at the International University of Japan. “I find it very difficult to assess it… Most of the E.U. would always go for democratic values; that’s our history, that’s in our blood. My question as an academic is, ‘What’s the bigger strategy?’”

Her research into the economic impact of the fight with Beijing offered alarming findings. While Lithuania’s sales to China plummeted, it continued to rely on Chinese imports and consumed even more than it had before the crisis.

“The trade deficit between China and Lithuania has expanded significantly,” Mačikėnaitė told HuffPost. Neliupšienė at the foreign ministry estimated that Lithuanian exports to China are currently at 15% to 20% of their previous level.

Vilnius is a compact capital dominated by bars and restaurants; its intelligentsia soon began circulating criticisms and gossip about the Taiwan policy. One common rumor held that Lithuania was privately refusing to open its office in Taipei until the Taiwanese delivered major economic support to compensate for the loss from China.

The State Department’s Fernandez recalled visiting Vilnius at the end of January. He noted “tensions within the government” and said he met counterparts who “felt beleaguered.”

“They felt they were in a fight with a bully, and they could not win,” he said.

Conscious of a Financial Times report claiming American officials told Lithuania to change the name of the Taiwanese office, Fernandez said he thrice repeated one message to the Lithuanians before they began their discussions: “We will support you in whatever decision. We believe in sovereignty.”

As a Cuban refugee, “I know very well the political price that some countries have paid for standing up for principles and also the anguish that political leaders feel when they’re putting their people at risk,” Fernandez later told HuffPost.

A year into the fight, two factors have largely turned a conversation about vulnerability and finger-pointing into one about solidarity and overdue change, analysts and officials say.

The first is Russia’s horrific invasion of Ukraine, which broadly bolstered the idea that democratic nations must defy dictators. The second is related: Lithuania and its friends ultimately agreed that it was vital to show China its tactics would not work.

Lithuanian officials already knew Beijing saw economic pain as the way to shift political calculations, according to Mickevičienė. After the Lithuanians publicly spoke of cooperating with Taiwan on pandemic preparedness, Chinese authorities suddenly said Lithuanian wheat — one of the country’s top exports to China — was infected with an obscure fungus and could no longer enter their country. Less than a year later, Chinese officials quietly communicated that the designation could disappear if Lithuania’s leader attended a summit with Xi.

“It became very obvious that it’s a political fungus,” Mickevičienė said. “Fungus has happened before and probably will continue happening if we don’t defend our interests.”

Lithuania opened its office in Taiwan, where a Lithuanian and a Taiwanese official are pictured here, nearly one year after the Taiwanese office opened in Vilnius.
Lithuania opened its office in Taiwan, where a Lithuanian and a Taiwanese official are pictured here, nearly one year after the Taiwanese office opened in Vilnius.
Photo by -/CNA/AFP via Getty Images

A Lithuanian Model

Increasingly, China’s bid to keep Lithuania in line seems set to backfire, inspiring more resistance in Europe and elsewhere.

Konstantinas Andrijauskas teaches at Vilnius University, a centuries-old hub of Lithuanian patriotism steps away from the country’s presidential palace. He feels pretty good these days about his nation’s approach to China.

“Chinese economic pressure has not produced the dire results that pessimists expected,” Andrijauskas told HuffPost, noting the apparent failure so far of the secondary sanctions that Beijing tried to apply on Lithuania via multinational companies and other European states. Instead, “China is trapped. Its image is being damaged; it is losing its soft power in the entire region.”

The U.S. Export-Import Bank’s massive credit was a coup for Lithuania that surprised even other parts of the Biden administration. And while Taiwanese backing for Vilnius took longer to materialize, last month’s announcements addressed the biggest Lithuanian priorities — semiconductors and lasers — and hinted at more good news to come. The day Taiwan unveiled those plans, Lithuania inaugurated its Taipei office.

Taiwan’s new funds to invest in Lithuania and its neighbors are “unprecedented” because Taipei has previously only used such programs to jumpstart its economy, Huang of the Taiwanese office in Vilnius told HuffPost.

Neliupšienė, the Lithuanian deputy foreign minister, said her government is courting a range of other Asian markets to diversify the Lithuanian economy and become less reliant on China. Taiwan can help, Huang noted: It’s a major trade partner for wealthy Japan and rising powers like Vietnam.

The strategy is almost exactly what many other Europeans wary of China want.

Charlie Weimers, a Swedish member of the European Parliament, called Lithuania’s acceptance of the Taiwanese office a “bold move.” He designed a bill last year that urged European countries to upgrade their relations with Taiwan. It won so much support across the legislature’s partisan divides that it passed with what Weimers described as “a North Korean majority.”

The goal is not to spark a conflict by breaking conventions around Taiwanese independence, Weimers said, but to become more confident about expressing sovereignty and support for human rights — and less afraid of Chinese wrath.

“If the Taiwanese can live with the status quo… so can we, and we should be practical,” he continued. He hopes that European “countries who struck deals with China can be reassured that this is a long-term effort in which we will find new partners to work with.”

“We will not just close trade routes,” Weimers said. “We will redirect them.”

Just as China tried to turn other Europeans against Lithuania, the Chinese ambassador to the E.U. pushed European officials to scuttle the Taiwan resolution, Weimers told HuffPost. And Beijing has previously put sanctions on European legislators for raising other sensitive issues like China’s crackdown on its Muslim minorities.

Huang said his country recognizes the risk of opening offices abroad and is cautious about doing so. Last month, Taiwanese voters delivered a big win to their country’s more China-friendly political party in local elections, and most Taiwan watchers believe the population is not interested in a major confrontation with Beijing.

Yet Lithuania also saw a significant vindication for its approach this year when its neighbors Latvia and Estonia — the other Baltic nations often seen as its closest parallels — withdrew from the Chinese-led dialogue for European countries.

The distinction makes sense to Mačikėnaitė, the Lithuanian professor. She told HuffPost it is important to differentiate between two issues in analyzing the Lithuania-China kerfuffle: Firstly, Lithuania’s willingness to pull away from China, and secondly, how close the country will truly become with Taiwan.

Ryan Hass, a former Biden advisor now at the Brookings Institution think tank, made a similar point this summer amid international anxiety over House Speaker Nancy Pelosi’s trip to Taipei. “I do not detect enthusiasm in Washington or elsewhere for dramatic shifts in government policies on Taiwan, barring an aggressive move by Beijing,” Hass wrote. “Taiwan’s best path for gaining greater international support for its political autonomy, economic dynamism, and dignity on the world stage is by continuing to demonstrate its steady, principled, and practical… approach.”

Lithuania is trying to do the same and hoping China will notice. When it opened its Taipei office this fall, it notably mirrored the Taiwanese office name — not calling the facility an embassy or consulate.

Mickevičienė, who until last month was the ambassador to China, told HuffPost the Lithuanians still have an ongoing dialogue with their Chinese counterparts.

“We’re patient — we understand that it’s always sensitive. That’s what China told us when we first had these intentions to host the Taiwanese. They said, ‘Oh, it’s too sensitive, not now.’ But the years are passing,” she said. “You can’t wait forever for China to become less sensitive.”

A Transatlantic Media Fellowship from the Heinrich Boell Foundation supported reporting for this story.


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