China is pressuring Continental, the German car parts maker, to stop using electronics made in Lithuania, Reuters has reported.
The news agency quotes “two people familiar with the matter”.
Read more: Lithuanian goods face boycott in China: blocked in ports, taken off shelves, shunned by buyers
One of the largest car parts makers in the world, Continental has production facilities in Lithuania that supply electronic parts, such as door and seat controllers. The company has declined to comment whether it has been urged by Beijing to cut out Lithuania from its supply chains, according to Reuters.
Continental Automotive Lithuania has also refrained from statements.
“We do not comment political issues on the corporate level,” spokeswoman Ieva Koncevičiūtė told BNS on Friday.
Meanwhile, China's Foreign Ministry has denied any pressure, but said that Chinese companies no longer trusted Lithuania.
This is an episode in an ongoing dispute between Lithuania and China over Vilnius' decision to open a Taiwanese representative office. Beijing, which views the self-ruling island as part of China, maintains that the move contradicts the so-called One China policy and attacks its domestic interests.
“I heard that many Chinese companies no longer regard Lithuania as a trustworthy partner,” a Foreign Ministry spokesperson told Reuters. “Lithuania has to look at itself for the reason why Lithuanian companies are facing difficulties in trade and economic cooperation in China.”
Earlier this month, Lithuanian exporters reported that they could no longer clear their goods with China's customs, because Lithuanian was removed from its electronic declaration systems.
Although the glitch was later removed, Lithuanian companies still report difficulties in doing business in China.
Although Lithuania's direct exports to China are negligible, there have been reports of multinationals being pressured to drop Lithuanian suppliers. According to a business association, one garment maker producing for a French company said the Chinese decided to no longer buy from that company, because its goods were produced in Lithuania.
Continental opened its facility in Kaunas District, central Lithuania, in late 2019, the biggest foreign investment in two decades. Last April, the German giant launched construction of a second facility in Kaunas Free Economic Zone. Continental's overall planned investment in Kaunas stands at 185 million euros.
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