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Ukrainian Sovereignty & China’s economic pressure on Lithuania from Taiwan’s perspective

While Taiwan was occupied preparing for a war against the variant virus Omicron at the outset of January 2022, China and Russia were conversely preparing for a showdown with the United States and Europe. If everyone thought that 2021 was a year of extreme pressure, the intensity of geostrategic conflict at the beginning of 2022 represents a moment of even greater tension.

Russia sends heavy troops to Russia-Ukraine border

In early December last year, U.S. intelligence officials warned that Russia may be preparing to dispatch 170,000 troops to invade Ukraine by the end of January 2022. The reasoning behind such an invasion was though to be in order to settle disputes that have reoccurred between Ukraine and Russia, such as ownership of the Donbas, since 2014. Ukrainian state security officials also warned that Russia had deployed nearly 100,000 troops on the Russian-Ukrainian border at the beginning of December 2021.

Then, on January 14 of this year, Ukraine suffered a large-scale cyber-attack that was believed to have been launched by Russia incandescently. The Russian army stationed at the Russian-Ukrainian border also held live-fire exercises, while its maritime drills in late January to early February even raised serious alarm bells in places as far as Ireland. Even if Russia continues to withdraw some of its troops from the exercise later this month, as has been speculated with hesitance, the fear that Russia may invade Ukraine will not disappear with this meagre gesture.

The scale of what we are seeing now is not comparable to the Ukraine-Russia conflict that we witnessed last April. Clashes between Ukrainian teams and rebels in Donbas escalated in April 2021 with Russia retaliating by immediately sending 20,000 of its troops to the border. NATO had also sent warships into the Black Sea, but the two sides have since withdrawn from the border despite claims from Russia in June of 2021 that it also clashed with the British navy in the Black Sea. Therefore, neither the scale nor the seriousness of military action that we witnessed last year is comparable to what we are seeing now.

In the second of numerous high-profile phone calls between President Biden of the United States and President Putin of Russia, the Russian leader made three demands of NATO and the United States: to not allow Ukraine to join NATO, not to accept new members in to NATO that border Russia, and not to build military bases in the former Soviet republics. All three of these points were roundly rejected by the United States. Yet NATO did not have any intentions to include Ukraine, nor did it have any designs to establish new military bases in its Baltic member states. Indeed, not since Albania and Croatia joined NATO in 2009 has there been any continuous eastward expansion of the alliance. Nevertheless, the driving force behind Putin’s aggressive actions is to cut Ukraine off from NATO partners, risking further exposure to Romania and other NATO easternmost countries on the Black Sea to great risk from its largest neighbour.

Some have speculated that Putin’s ardent requests signify his grand motive to force a peace through war, or the threat of. In addition to ensuring the security of the borders that his demands consider, it may also be an intentional bid to finally summarize the 2014 invasion of Crimea and the Udon region. After all, from the perspective of Russia, Belarus, its most iron-clad ally in the past, has been in a state of constant anarchy since its election, now forced to be involved in a bloody power struggle between previous Kazakh presidents.

As tensions have gradually escalated over the past year in Eastern Europe, we also saw Germany establish a new government and officially enter the post-Merkel era. France, which now holds the presidency of the European Council, has also seen a new presidential election boom. Since September, there has been discordance between France and the United States because of the AUKUS alliance, made up of the United States, Britain and Australia. Beleaguered by this situation, France continues to strongly advocate that the EU needs strategic autonomy relative to the United States. Indeed, one could argue that that the relationship between the United States and Europe has been steadily waning for at least two decades now. Furthermore, it is not untrue that United States has geopolitical concerns of its own to worry about, such as the rapid ascension of a belligerent China. In the eyes of Putin, it seems the opportune moment to let the United States and Europe lose interest in Ukraine and Crimea while they are otherwise occupied.

Some have argued that when the United States and Europe are paying close attention to Russia and Ukraine, Taiwan should conversely seek to be more cautious and actively ease its relations with China so that it will not be viewed as a ‘troublemaker’ that the United States needs to take care of. This sentiment is reminiscent of the early days of the Iraq War, when the United States did not want Taiwan to cause trouble in the Taiwan Strait in order to focus its full attention on fighting a war in the Middle East.

While I agree that the first half of this sentiment holds true, that Taiwan must be careful, I am sure that the second half is wrong. Firstly, strategically, if the situation in Ukraine continues to deteriorate, the United States will seek to ask its Indo-Pacific allies to strengthen their preparations in East Asia to prevent China from acting rashly. It is likely that the United States will want to increase military patrols in the Indo-Pacific region, not reduce them.

Secondly, if Taiwan does not want to be viewed as a troublemaker, it should not seek to show weakness or lose its drive to seek temporary cross-strait reconciliation. Instead, it must endeavour to build strong national defence capabilities and reinforce the collective will to defend itself. Certainly it is correct to say that China is an enemy of Taiwan, and that Beijing wants to annihilate Taiwan’s right to international existence. The ultimate goal of China’s foreign policy is to eliminate Taiwan’s identity, something that is not likely to change any time soon, as Beijing has made clear in many of its policy documents.

What Taiwan needs to do in this regard is to build up its own defence forces and strengthen communication with the United States with regards to China’s intelligence and information so that China will not act rashly against Taiwan. This would allow the United States more leeway and unfetter it to deal with the Ukraine crisis and Russia.

China’s economic oppression of Lithuania

In addition to a possible Ukrainian invasion by Russia, China’s recent economic oppression of EU member Lithuania also requires careful attention.

Although China has stated publicly that it would punish Lithuania over violations of its customs in relation to the ‘one-China policy’, Lithuania did not in fact initiate diplomatic relations with Taiwan, despite China’s claims. The EU itself has established representative offices with Taiwan, yet China continues to vigorously oppose EU countries setting up representative offices in Taiwan.

Adding more fuel to the fire, some say that the name of the representative office in Lithuania includes the name of the country Taiwan itself, and not, as is correct, Taipei (Taipei Economic and Cultural Representative Office, TECRO). Regardless, the American Association in Taiwan includes ‘Taiwan’ in its title, and the new name used by the Japan-Taiwan Exchange Association before the establishment of its office in Lithuania is also the same case. Even Taiwan itself still uses the “Republic of China” moniker for its representative offices of some non-diplomatic countries, which is much more politically sensitive than the name of the Taiwanese representative office used by Lithuania. However, whether it is the establishment of the office itself or the name of the office, China’s reasons are untenable.

It is likely that, in addition to the Czech Republic, Slovakia, and other Central and Eastern European countries, more may follow in Lithuania’s footsteps to withdraw from China’s “17+1” bloc in Eastern Europe and strengthen relations with Taiwan. Although Lithuania is unlikely to falter from the path it has chosen with regards to its relationship with China, China feels it can at least warn others of what the consequences may be for such transgressions, and make these “small” countries fearful.

Intriguingly, the incident with Lithuania occurred close to the event of the 20th National Congress of the Communist Party of China. Xi Jinping will no doubt be worried that this will give his opponent a political pretext to attack him. Under the premise that everything must be completely controlled, further rebuttals against Lithuania will be feared to be even more severe.

What is important here is not the Chinese economic oppression of Lithuania in and of itself, but the manner of such oppression. Lithuania originally estimated that, because of its limited economic exchanges with China, Beijing’s ability to suppress Lithuania would not be crippling, and Lithuania could afford it. But what few people knew was that China was simultaneously oppressing other EU manufacturers in China, demanding that products exported to China not contain Lithuanian-made content, an action that is in direct violation of WTO rules. If Lithuania does decide to sue for WTO arbitration, it is very likely to win the case. The problem, however, is that the results will take a long time to come through when the damage has already been done.

Despite this legal stance, China has had success in other areas of its oppression campaign against Lithuania; mainly businesses from Germany and other EU countries immediately bowing to this pressure. Some EU member states have even gone so far as to blame Lithuania for the situation, stating that the decision to set up the office had not been communicated with the EU in advance. However, earlier establishments of representative offices between Slovakia and Taiwan, as well as the establishment of offices in Taiwan by the European Union more broadly, required no prior notification or high-level communication between member states.  This shows that the EU has unrealistic or willingly blind illusions about China, characterized by a selfish mentality of still trying to enjoy the dividends that an economic relationship with China can have for the EU.

Thankfully, Lithuania continues to benefit from the ardent support of the United States. Taiwan has also actively invested US$200 million to assist Lithuania, no small amount for a country of Lithuania’s size. Yet it is the EU as a whole that must come to the aid of Lithuania, as its imports and exports are mainly EU member states. When China blatantly confronts an EU member state, the immediate response of some EU countries is not to resist this unreasonable oppression, but to blame the victims for unreasonably causing trouble for their own business, branding it a ‘troublemaker’ and weakening the alliance of the bloc.

Will the Lithuanian repression model play out in other countries?

The French foreign minister has said that he intends to raise a case against Chinese repression, and in addition also intends to launch an “Anti-coercion Instrument” against the Asian superpower. Hopefully, this vision will become a reality that is reflected in the text of the EU’s Indo-Pacific strategy, expected to be officially released in April.

When China finds that this kind of pressure against Lithuania, a country which has limited direct economic and trade exchanges with China, to be effective, we must ask ourselves; will it be further used on other countries that have diplomatic relations with Taiwan, including some the solitary countries that have diplomatic relations with certain continents? China’s approach will be supplemented by economic pressure, one that should not be taken for granted with an economy as powerful as China’s.

China’s aggressive moves against Lithuania also aptly convey the capability of China to use its domestic markets as a weapon of external pressure, feared to become more and more frequent with the promotion of its dual-circular economy strategy based on internal circulation. In the past, China has used direct economic and trade activities to exert pressure, such as the banning of tuna from Norway, coal and red wine from Australia, rare earth exports from Japan, and even a ban on the import of bananas from the Philippines, and pineapples and wax apples from Taiwan.

Through secondary pressure, countries with limited direct trade with China are also being harmed, isolating the country in question further from its economic circle. If China really intends to make Lithuania suffer, it is vital that we not only pay attention to the application of China’s method against other countries, but also the dependence of multinational companies on the Chinese market that will make it easier exert such pressure.

Although some foreign investors believe that China’s influence on the world economy is not as strong as it once was, China is still a country with a large economy and will be so for the foreseeable future. If it uses its own internal market as a weapon on the international stage, its ability to generate severe pressure external to its borders is a threat that cannot be ignored. The former chief of staff of the NATO Secretary-General once mentioned that democracies need to establish “NATO-like Article V” mechanisms in the economic field in order to face down successfully such economic oppression. Now is the time to discuss how to make this mechanism possible.

While it is debatable that we entering in to a ‘new Cold War’ period in international relations, it is becoming increasingly clear that the era of the relative independence of the globalized economy in the recent past is waning. The rise of the geo-economy and the requirements for a safe and resilient supply chain herald new revisions to the notion of economic globalization. Tensions in Ukraine and the situation in Lithuania are just a sample of what may be a new system of international confrontation.

Dr. I-Chung Lai is a Taiwanese scholar of China studies and international relations. He is currently President of the Prospect Foundation in Taiwan.

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