Lithuania Shows China’s Coercive Trade Tactics Are Hard to Counter

It has been two weeks since the doors to the Chinese market slammed shut to Lithuanian products. Accounting for just 0.2 per cent of global exports, the Baltic nation’s problem is negligible for the rest of the world. But it is just the latest example of China wielding a weapon against which other countries have yet to find a shield: coercive economic statecraft.

Beijing has been targeting foreign companies or industries to “punish” their governments for policies with which it disagrees. Measures have included a suspension of rare earth exports to Japan after a maritime clash off the disputed Senkaku Islands, a curb on Norwegian salmon imports after the awarding of the Nobel Peace Prize to dissident Liu Xiaobo and a ban on Australian wine and barley imports in retaliation for Canberra’s demand for an inquiry into the origins of Covid-19.

In the same vein, after Lithuania allowed a Taiwanese representative office to open in Vilnius, it disappeared from the Chinese Customs Administration’s country list on December 1, making it impossible for companies to file customs paperwork.

“Every country uses economic coercion in some way — the US has a whole sanctions regime,” said Emily Kilcrease, at the Center for a New American Security, a Washington think-tank.

But, she noted, democracies are at a disadvantage: under its authoritarian system, Beijing can target companies or products without invoking any related laws to justify its actions.

Read the full story and more from The Financial Times.