Home Business Taiwan Sets up a $200m Lithuania Fund, Despite China’s Warnings

Taiwan Sets up a $200m Lithuania Fund, Despite China’s Warnings

Taiwan Sets up a $200m Lithuania Fund, Despite China’s Warnings
Source: DW

As it seeks to ward off Chinese diplomatic and commercial pressure on Lithuania, Taiwan has announced the establishment of a $200 million (£148 million) fund to invest in the Baltic state.

Taipei has stated that it plans to make its first investment later this year, with the funds guaranteed by the Taiwanese government’s national development fund and central bank.

It comes after Lithuania permitted Taiwan to build a de facto embassy there, indicating that the two countries’ connections are deepening.

Days thereafter, China downgraded its diplomatic relations with Lithuania.

“It’s time for us to help you with your challenges,” Taiwan’s deputy foreign minister Harry Ho-jen Tseng said when announcing the proposal.

After purchasing 20,000 bottles of Lithuanian rum intended for China, Taiwan is sharing advice with the public on how to consume and cook with rum.

Taiwan Tobacco and Liquor Corporation acquired the rum after discovering that it would be banned from entering China, according to state-run media.

China has denied restricting commerce from Lithuania, claiming that doing so would violate international trade regulations. However, the European Union has confirmed allegations of products being held up at Chinese customs.

Although China accounts for only 1% of Lithuania’s exports, the issue with rum imports is the most recent case alleged to have impacted Lithuanian enterprises.

Beijing has a history of levying unofficial trade penalties against nations with whom it has a disagreement. It has also imposed boycotts on a number of Australian products, including meat, wine, and barley.

After the Baltic state permitted Taiwan to construct a de facto embassy there, China downgraded its diplomatic relations with Lithuania in November.

The new office is called Taiwan rather than “Chinese Taipei,” as many other countries have done to avoid hurting China.

The opening of a new Taiwanese office in Lithuania does not imply official diplomatic connections, but it might be interpreted as an indication of strengthening ties between the two countries.

It was the first new diplomatic presence for the island in Europe in 18 years. As a result of China’s coercion, Taiwan has just a few formal allies.

Lithuania affirmed its right to establish relations with Taiwan while also stating that it adhered to the “One China” policy.

The diplomatic acceptance of China’s assertion that there is only one Chinese government is known as the One China policy.

Beijing considers Taiwan to be part of its territory, despite the fact that it is a self-governing democratic state. It has increased pressure on the island to isolate it from its foreign friends in the recent year.