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Australian Polity, Volume 10 Number 1 & 2

March 2022 issue of Australian Polity

March 2022 issue of Australian Polity

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Lithuanians are no strangers to foreign

oppressors and totalitarians. After finally winning

independence at the end of the Great War, they

had barely two decades of self-rule before being invaded

by the Soviets in 1939. The Nazis then overran the

nation in 1941, murdering more than 100,000 Jews

during their occupation, before the Soviets reclaimed

the country. For the next five decades, Lithuania was

under the thumb of the Soviet communists, but the

spirit of the people was never quelled. In 1991, the Baltic

state, the home of just 2.7 million people, proclaimed its

independence, the first Soviet satellite to do so, earning

the wrath – and an economic blockage – from Moscow.

Shortly after, the Soviet Union collapsed.

Today, Lithuania is facing new threats from oppressors.

Last year, the government of Prime Minister Ingrida

Šimonytė withdrew from the ‘17+1’ block of central and

eastern European countries following Parliamentary

approval. Formed with China in 2012, the group fostered

cooperation with Beijing, including Belt and Road

Initiative projects. The Lithuanian Foreign Minister said

the arrangements had brought ‘almost no benefits’ to

the Baltic state after a decade. Not only did Lithuania

withdraw from the block, it upgraded relations with

Taiwan and allowed the Republic of China to establish

an office in Vilnius, attracting the ire of the PRC which

withdrew its ambassador and implemented a de facto

trade embargo. Even a shipment of Lithuanian rum was

blocked, prompting Taiwan to purchase it instead! Taiwan

has also floated $200 million fund to invest in the Baltic

state. The European nation would be consigned to the

‘garbage bin of history’ threatened China.

There are only three strategies in the Beijing playbook:

bully and intimidate; accuse adversaries of doing what

China itself does; and engage in tantrum diplomacy.

All three were on display with Lithuania. Not only did

the PRC block imports from Lithuania, it halted goods

from Europe containing parts made in the Baltic State,

leading to warnings from the EU Trade Commissioner

that Europe would take China to the WTO if the issue

was unresolved. Not that China fears the WTO; it has

flouted the Organisation’s rules ever since its entry

to the body two decades ago and its de facto ban on

Lithuania is outside the normal jurisdiction. But the

warning impressed on China what it fears the most:

concerted action by other nations in defence of an

international rules-based order.

German companies were a specific target of Beijing

bullying. The car parts manufacturer, Continental, was

‘instructed’ to stop using components made in Lithuania.

Europe hit back at China, imposing tariffs on aluminium

exports to the continent. In turn, Taiwan is exploring the

manufacture of semiconductors in Lithuania. Whether the

long-standing accommodation of China by the Merkel

government changes under her successor as Chancellor,

Olaf Scholz, remains to be seen. German reliance on

Chinese trade is significant. In his first phone call with

President Xi, Scholtz spoke about trade and failed to

mention human rights at all. However, the nation’s new

foreign minister, Annalena Baerbock, a China-hawk, has

called out the PRC for its human rights record and recently

sent a naval vessel to exercise with the Vietnamese. EU

parliamentarians have criticised China’s human rights

record and an increasing number are supportive of

Taiwan. At the heart of the EU is a commitment to the

unity of the union and internal free trade – a factor Beijing

seems to have underestimated. Senior French officials

said they would push for EU action against China. The

annual EU-China summit was postponed. The Lithuanian

vice- Foreign Minister stated, ‘what we decide to do, by

calling Taiwan, is up to Lithuania, not Beijing.’.

Canadian Prime Minister Justin Trudeau reinforced the

need for international unity against Xi’s war on the world.

Better known as the ‘warrior of woke’, Trudeau nonetheless

spelt out a truism of the new geopolitical realm: “We’ve

been competing, and China has been from time to time

very cleverly playing us off each other in an open-market,

competitive way. We need to do a better job of working

together and standing strong so that China can’t play

the angles and divide us one against the other.” Trudeau

backed up his sentiments by sending a Canadian naval

vessel to the China Sea.

Regrettably, the strategic reality is still falling on deaf

ears in much of the financial and business community

which cling to an outdated notion that China is some

version of a free, capitalist market in which investments

will remain safe and secure under the benign guidance

of the CCP. Exhibit number one is the head of the world’s

largest hedge fund, Ray Dalio. Asked a question about

Australian Polity 13

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