The Chinese must be anxious about their diminishing image on the world stage.
For some weeks, importers have been unable to list Lithuania as a country of origin in Chinese customs databases, making it impossible to clear shipments (Lithuania does not export much to China, however). German and French firms have been warned that they may not ship goods with Lithuanian components to China, potentially blocking hundreds of containers already in transit. There are rumours that the People’s Bank of China, the central bank, has forbidden banks from issuing letters of credit covering trade in or out of any port in the Baltic states. When eu officials raised these concerns, Chinese authorities retorted that Lithuania is lying and that the eu should beware of being taken hostage by a tiny troublemaker.
In its desire to punish Lithuania, China is betting that bigger eu powers will think of China’s market and abandon the Baltic minnow. In doing so, China overlooks the extent to which small or mid-ranking European countries have a horror of a world in which great powers set their own rules. Europeans loathed Mr Trump for his America-first trade policies. They detest China-first bullying just as much, especially when it threatens the integrity of the European single market.
In eu councils even Hungary, which is normally friendly to China, is speaking up for Lithuania. On November 30th France’s president, Emmanuel Macron, told Lithuania’s, Gitanas Nauseda, that France sees engagement with major powers as a vital interest—but puts a higher priority still on eu solidarity. On December 8th two senior eu officials warned that the apparent trade ban, if confirmed, may put China in breach of its World Trade Organisation obligations. Soon afterwards the eu unveiled new instruments to retaliate against economic coercion by third countries. Free-traders within the bloc doubt whether such tools can work. But the same governments are also troubled by China’s behaviour.