"The adviser
to the Lithuanian president on foreign policy issues, Asta Skaisgirytė, tells "Žinių
radio" that if China hears Lithuania's message, relations could be
normalized again. "Even in the midst of the conflict, Lithuania said that
it does not want to end diplomatic relations, it does not want to send the
ambassador home, that it wants to continue with cooperation acceptable to
both sides. If China hears our cry, I think it will be possible to normalize
relations," said the presidential adviser.
According to her,
both Lithuania's allies and the EU are trying not to clash with the world's
second largest economy. The representative of the Presidency noted that
although China's economic pressure has not disappeared, Lithuanian business has
managed to reorient itself.
Really? What
losses have we suffered? Is it worth talking about the normalization of
relations between Lithuania and China? Arūnas Laurinaitis, vice-president of
the Lithuanian Confederation of Industrialists (LPK), spoke on this topic in
the "Dienos klausimas" program of Žinių radio. According to him, the
situation is ambiguous - the policy pursued by China helped Lithuania's
business to reorient itself. This pushed Lithuanian businesses to look for ways
to end existing contracts and extend new ones.
"Business is
wise - various schemes have appeared. Some companies have switched to using the
services of intermediaries. Lithuanians imported goods through those companies
that were located in Poland, Germany or Latvia - countries that did not have
political problems with China. Some companies, having calculated what is better
for them, went on to establish companies in the mentioned countries.
However, starting
to work through intermediate countries, Lithuanian business experienced
additional costs and difficulties.
Firstly, the
delivery time increased - companies faced an additional need for working
capital: more money had to be frozen until the goods reached Lithuania via an
intermediate country.
Naturally, the
intermediary also wanted to earn extra.
There were also
additional costs when transshipping the production from some country and
transporting it to Lithuania", said A. Laurinaitis.
He reminded that when
the conflict with China arose, there were moments when Lithuania completely
disappeared from the customs system, and there was an indirect instruction for
Chinese businesses not to do business with Lithuanians. This naturally forced
Lithuanian business to withdraw from China.
The vice
president of LPK calculates that, comparing 2021 with 2022, exports to China
have decreased more than 10 times.
At the moment, it remains only as useful to
China: it continues to import from Lithuania the corresponding products,
semi-finished products, which it does not produce itself. These are special
electronics, very accurate measuring devices, various lasers, metal alloys. And
all other goods, which used to be imported from Lithuania and which could be
replaced very quickly by others, completely disappeared from the Chinese
market.
"The
majority of Lithuanian companies believed Lithuanian politicians that China is
a priority market for Lithuania. The state spent money for organizing visits
and exhibitions. Lithuanian business, following politicians, had invested quite
a lot in finding partners and entering into contracts. With the closure of the
Chinese market, all the main export directions, the companies that worked in
them had to leave China.
We preliminarily
estimate that about 80 percent have left. companies that have worked with
China. However, as I mentioned, some companies operate through intermediary
companies or countries.
If we exclude
them as well, up to 50 percent. companies that worked with China were forced to
stop working and leave the Chinese market due to the cooling of relations
between Lithuania and China", commented the interviewer of the show.
According to him,
although at that time Lithuanian businesses expected a lot from the Taiwanese
market, the expectations did not come true. "Today, politicians want to
celebrate that they have found a counterweight to China, but this is not
true," said A. Laurinaitis. He evaluates figures showing import and export
volumes from and to China.
The LPK
vice-chairman pointed out that it took 5-6, and sometimes 8 years to enter the
Chinese market.
As for building
relations with the Taiwanese market, now, according to A.Laurinaitis, they are
only at the initial stage, when there are a lot of delegations both to one side
and to the other side, and Lithuanian business is trying to understand
Taiwanese culture. "Everything takes time, but the closure of China and
the opening of Taiwan today do not offset the business perspective that was
foreseen in China and that is emerging in Taiwan," the interviewer
assessed. He recalled the recent meeting between the German Chancellor and the
Chinese President, where cooperation was discussed.
Germany has
invested the most from EU countries in China.
"There is a
lot to communicate in the European business confederation BusinessEurope, which
connects 40 business structures from 34 countries.
Absolutely all
countries, when we talk about the case of China, have clearly said that they
will not be active in defending Lithuania, so as not to harm the members of
their countries.
They understand
very well that China is the second largest economy in the world. China has some
components that are very much needed for renewable energy. Let's say silicon,
the main raw material in the production of chips, semiconductors - everything
is concentrated in China. Therefore, not having relations with China would push
Lithuania into such a situation that Lithuania would have to reconsider what
industries or business branches could remain competitive if the situation with
China did not improve", said the LPK representative.
And whether it will
improve, no one knows for sure - there are both optimists and pessimists. Last
month, BusinessEurope organized a meeting of business and ex-member country
leaders with the Chinese ambassador to the EU and other Chinese business
representatives. According to A.Laurinaitis, the ambassador, without mincing
words, clearly said that if Lithuania wants to have normal relations,
politicians must find an agreement and start talking.
"When
politicians change, everyone thinks that the previous government is evil, so
something needs to be changed. Although I have not seen any country where
politicians earn money. When politicians underestimate the business and say
that they know better how to do what, it becomes a bit strange," the
interviewer of "Žinių radio" thought. The extent to which business
would return to China would depend on the relationship of trust between
politicians and the rebuilding of business, and whether a formula could be
found to develop a coherent business. "Business doesn't want to do
politics, it doesn't want to engage in diplomacy, but it wants there to be a
relationship between politics and business in those countries where business
sees a perspective," said A. Laurinaitis.
He talked about
the fact that when he went to China, business invested money, people, some
companies even changed technological lines, some borrowed money and gave
corresponding commitments to banks, planned development - that is, they
accepted people, made commitments to their families that employees would get
salaries, will be able to take out housing loans. Therefore, the quick one-day
decision to close the market was extremely unexpected.
"In my
understanding, it could probably have been done if the politicians had said
that there would be certain decisions in a year or two. This would have been
enough for the business to allow them to exit the Chinese market as much as
they thought was safe, risk-free. "Politicians should not make decisions
for business, because business assumes all losses, and politicians assume, if
they do, political dividends," said the LPK vice-president.
In response to a
possible military conflict between China and Taiwan, he said: "None of us
know what will happen with China and Taiwan, but we should listen more to the
attitude of the big countries - the United States, Germany - towards China and
Taiwan, and maybe learn a little diplomacy before the whole world has a
relationship with China and benefits from it. This is necessary so that
Lithuanian business is not pushed to the economic margins and unfair
competitive conditions are not created for it, because most of the production
goes to EU member countries, and they have opportunities to get materials and
semi-finished products from China."
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