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2021.12.03 17:31

Lithuanian goods face boycott in China: blocked in ports, taken off shelves, shunned by buyers

Vaida Kalinkaitė-Matuliauskienė, Valdemaras Šukšta, Gabrielė Sagaitytė, LRT.lt2021.12.03 17:31

This week, Lithuania was dropped from China's customs registry. Lithuanian businesses say their goods are being taken off shelves in China and even avoided by ordinary customers, which further complicates the situation.

Saulius Galadauskas, president of the Lithuanian Brewers Association, said the situation is worrying. The exclusion of Lithuania from China's customs system has not only prevented the entry of goods, but has also brought trade programmes to a halt.

Read more: Chinese ports start blocking Lithuanian goods – media

“Exported beer has been returned, not accepted. We also run a programme promoting exports to third countries, including China. But it is becoming pointless to continue this programme,” Galadauskas told LRT.lt

According to him, it is too soon to estimate losses incurred by Lithuanian brewers, but he confirmed that China has started turning around their containers and removing their products from supermarkets.

Asked about the importance of exporting to China, Galadauskas said that “it is a large market. Everyone wants to be part of it, if there is such an opportunity.”

Lithuanian cereal and snack producer Naujasis Nevėžis has recently started exporting its goods to China. The company has now been forced to halt all activities in the country, said the company's export project manager Gintarė Budrikaitė.

“We are no longer able to ship our products to China because of the new requirements imposed. We have orders that have been produced. We must store them ourselves,” she said.

According to her, Naujasis Nevėžis has entered into prepaid contracts with Chinese companies, so the losses will be on China’s side.

Lukas Puidokas, head of business development and export projects at a cosmetics producer Biok Lab, said that the company has been encountering difficulties related to the Chinese market for some time.

“The first signs that the situation was becoming more complicated came long before China announced that it was removing Lithuania from its customs system,” Puidokas told LRT.lt.

“Now that Taiwan has opened a representative office in Lithuania, any cooperation with China is frozen due to risk management on the part of our partners,” he added.

According to him, Chinese customers have become more reluctant to buy Lithuanian goods after the opening of Taiwanese representation in Vilnius.

Biok Lab has already lost “hundreds of thousands of euros'' due to the closure of the Chinese market, Puidokas said. But the company expects to compensate for these losses in other Asian markets.

“In the short term, losing cooperation with China will be costly. But in the long term, it can be beneficial not only for us but also for Lithuania,” Puidokas said.

“One of the most promising Asian markets for Lithuania is Taiwan. Not long ago, we signed a promising contract and soon, Biok Lab products will reach Taiwanese retail chains,” he added.

Blow to the port

According to Algis Latakas, director general of the Port of Klaipėda, the port has not yet been affected by China’s decision to drop Lithuania from China’s customs registry.

But in the long run, the port might see a drop in revenues if Lithuanian companies stopped sending goods to China, Latakas said in a written comment.

On Friday, the Lithuanian finance minister Gintarė Skaistė said China’s actions will not significantly affect Lithuania's economy.

“Looking at Lithuania's ties with China, our exports to this country account for around 1 percent of Lithuania's total exports. So, it's not our major trade partner. Therefore, we don’t expect a major impact on Lithuania's economy and businesses,” Skaistė told reporters after the cabinet meeting.

Read more: Lithuania's economy won't be significantly hit by China's boycott, says finance minister

Beijing has been protesting Lithuania's decision to open a representation office of Taiwan, a self-ruled island that it considers to be part of China.

In November, Beijing downgraded its diplomatic representation in Vilnius. Lithuanian firms have previously reported difficulties exporting and doing business in China.

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