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
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