After Lithuania’s trade dispute hindered exports, German companies launched an attack on China
After China banned the import of products from German manufacturers in Lithuania, Germany’s powerful business lobby slammed China.
After companies from other EU member states were attracted by China’s decision to ban imports from the Baltic States, BDI accused Beijing of “destructive own goals.”
“China’s latest measures against Lithuania amount to a trade boycott and will affect the entire European Union,” it said. “The German manufacturing plants in Lithuania that need to import products from China are also affected, and German exports to China also include Lithuanian components.”
“In the long run, China’s upgrade is a devastating goal of its own. This shows that China is ready to decouple economically from its “politically unpopular” partners. BDI is very clear that the value chain that is the core of the EU’s single market is affected. Any damage cannot be tolerated.”
However, in criticizing Lithuania’s move to strengthen relations with Taiwan, the move triggered a crisis and it criticized individual countries that were “out of touch” with EU policy.China is Germany’s largest trading partner, The value of commodity transactions in 2020 is 213 billion Euros.
“Maintaining a high-level economic relationship with China is still important,” BDI said. Its statement will put pressure on Berlin for diplomatic intervention.
According to people familiar with the matter, German blue-chip auto parts supplier Continental is one of the companies that has been blocked by Chinese customs authorities from exporting. The company produces telematics control units in a factory in Kaunas, Lithuania.
China Blocked all imports from Lithuania earlier this monthAfter the Baltic States allowed Taiwan to open a de facto consulate in its capital, Vilnius. Beijing, which regards Taiwan as part of China, has also suspended consular services in Lithuania. Vilnius withdrew its diplomats from China out of concerns about their safety.
But China’s import ban on Lithuania is now beginning to hurt foreign companies that build manufacturing facilities in this low-cost country.
An industry representative in Lithuania told the Financial Times that Lithuanian officials met with the European Commission on Friday.
The EU is preparing a legal case at the World Trade Organization, which may take several months.
A person familiar with the matter said that Continental Airlines, which operates in 58 countries/regions, is considering shipping products from Lithuania through other countries/regions to avoid further blockades by China. The company declined to comment.
According to an industry representative, Hella, another German supplier with a large factory in Lithuania, also encountered difficulties exporting to China, as did small companies doing business in the country. Hella did not immediately respond to a request for comment.
A spokesman for the German Ministry of Economic Affairs said that it was aware of the difficulties Continental Airlines had encountered and was “concerned” about the developments, but did not elaborate on the coalition government’s plans.
Florian Schroeder, managing director of the German-Baltic Chamber of Commerce, said that several German companies have been seeking advice from the agency after encountering difficulties in importing and exporting products.
“For the past 5 years, we have been working hard to build a cluster of small car suppliers,” he told the Financial Times.
“Now that things have escalated, many German and Lithuanian companies have been affected.”
Chinese officials denied ordering any action, but told the European Union that private logistics companies and importers might angrily avoid Lithuanian goods because of Lithuania’s links with Taiwan.
Brussels is collecting evidence, but many companies worry that if they complain, they will be completely excluded from China.
Additional report by Richard Milne in Oslo