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Taiwan to set up US$200 million fund to invest in Lithuania amid dispute with China

Taiwan to set up US$200 million fund to invest in Lithuania amid dispute with China

Taiwan flags at a square in Taoyuan, Taiwan on Oct 8, 2021. (File photo: Reuters/Ann Wang)

VILNIUS, Lithuania: Taiwan said on Wednesday (Jan 5) it will create a US$200 million fund to invest in Lithuanian industries and boost bilateral trade as it tries to fend off diplomatic pressure on the Baltic state from China.

Lithuania is under pressure from the China to reverse its decision last year to allow self-ruled Taiwan to open a representative office - a de facto embassy - in Vilnius under its own name.

Beijing claims Taiwan as its territory, ineligible for diplomatic ties of its own with other countries. Taiwanese representations in other countries, except the unrecognized Somaliland, are named after the capital Taipei.

China in August recalled its ambassador and in November downgraded diplomatic ties with Lithuania, and is pressuring companies such as German car parts giant Continental to stop using components made in Lithuania. It has also blocked Lithuanian cargos from entering China.

Lithuania's direct trade with China is modest, but its export-based economy is home to hundreds of companies that make products such as furniture, lasers, food and clothing for multinationals that sell to China.

The strategic investment fund will be funded by Taiwan's national development fund and will be backed by the Taiwan central bank, the head of Taiwan's representative office in Lithuania, Eric Huang, told an online news conference.

"We will establish the fund as soon as possible and we hope this year we will have some tangible results ... I can imagine the first top priorities will be semiconductor, laser (and) biotechnology," Huang said.

Taiwan has redirected 120 shipping containers from Lithuania blocked by China into its market, and will take "as much as possible" more, Huang said.

Taiwan will be also accelerate its approval process for Lithuanian diary and grain exports into Taiwan, and will seek to link Lithuanian businesses into Taiwanese supply chains, he added.

Integrating Lithuania's laser industry into manufacturing semiconductors in Taiwan is another possibility, Huang said.

Taiwan's Deputy Foreign Minister Tseng Hou-jen called the Chinese response to Lithuania allowing Taiwan to open the representation under its own name "disproportionate".

"Calling Taiwan Taiwan is not a violation of EU's One China policy ... The US and EU refer to Taiwan as Taiwan in their official documents, and China keeps quiet," he said.

"China's action seems to have targeted what it perceives as vulnerable country, for its political gains. But giving in is not the best way in dealing with bullies."

Source: Reuters/ng

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