China has pressed multinationals to sever ties with Lithuania or face exclusion from its market, an unusually harsh move that has dragged companies into a political dispute and placed Beijing on a collision course with the European Union. L1N2SU0G7
Last month, Lithuania's Prime Minister Ingrida Simonyte met with business leaders, including executives from German car-parts giant Continental, to listen to their concerns, said one person who attended. The European Union's top trade official, Valdis Dombrovskis, is also attempting to mediate between Beijing and Vilnius, ahead of a possible EU-China summit meeting in the coming months, said a person with knowledge of the matter. Lithuania belongs to the 27-state bloc.
The Commission said it was reaching out to China to resolve the situation and "collecting facts and evidence" to see if China was complying with international trade rules. "We will not hesitate to act to defend our rights," said the spokesperson. The stand-off threatens Lithuanian industry, which has built up clusters of factories making parts destined for overseas, such as furniture, clothing, car parts and lasers. Hundreds of containers of goods and parts are in limbo.