Lithuania's food industry expects to bear the brunt of the deterioration of Vilnius-Beijing diplomatic ties, which will lead to a freeze in business cooperation, says the head of the Lithuania-China Trade Association.
Meanwhile, Lithuanian exports that are more essential to China might be less affected, according to Rokas Radvilavičius.
Read more: China downgrades diplomatic ties with Lithuania over Taiwan
“Lithuanian businesses that provide various technologies, including biotechnologies, to China, have not seen their operations affected by the cooling of the [Vilnius-Beijing] relations yet, because the Chinese need them,” he said in a comment to BNS. “Whereas areas like the food industry, which is not as vital for China, might find it much harder. They might see disruptions, and probably major ones.”
China has announced a downgrade in its diplomatic relations with Lithuania, where Beijing will be represented by a chargé d’affaires instead of an ambassador. The move came on the same week that Taiwan opened a representation in Vilnius.
The Lithuania-China Trade Association is working with two dozen Lithuanian technology and laser companies looking to expand relations with China, Radvilavičius said. The downgrade of diplomatic relations will make the efforts harder, he added.
Read more: Taiwan representation opens in Vilnius
“We do not directly represent Chinese businesses in Lithuania or Lithuanian businesses in China, but we help them implement projects more easily, therefore the souring of the diplomatic relations is undoubtedly bad for trade and economy. More disruptions will follow, including in the areas of supply and cooperation, and many projects might be frozen,” the association head said.
The diplomatic crisis is already affecting Chinese plans to invest in renewable energy projects in Lithuania, Radvilavičius said, adding that Chinese companies are currently cautious about any cooperation with Lithuania.
“China is still interested in renewable – wind and solar – energy projects in Lithuania. These would be large-scale investments, but the Chinese are now on the watch and cooperation has cooled down. Obviously, China's state-owned companies will not invest their money in such a situation, unless there's a specific agreement with the Lithuanian government,” Radvilavičius said.
The Lithuanian government blocks Chinese investments into strategic projects, quoting cyber security risks. However, Radvilavičius says there are no restrictions for Chinese companies to participate in renewable energy projects.
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