Page 38 - bne magazine September 2021_20210901

38 I Central Europe bne September 2021
Sizzling tensions with China pose new threat to Lithuania’s food exports, rail freight sector
Linas Jegelevicius in Vilnius
The already strained relations between Lithuania and China reached a new low when China recalled its ambassador in Vilnius and asked Lithuania to do the same with its ambassador in China.
Beijing took the extreme action in response to the plans by the Baltic country and Taiwan to establish reciprocal diplomatic offices.
Only 15 countries recognise Taiwan as a sovereign nation. Lithuania does not yet have formal diplomatic ties with Taiwan, but it maintains increasingly friendly relations with Taipei. Vilnius has been an increasingly vocal critic of China’s actions towards Taiwan, as well as in Xinjiang and Hong Kong, has withdrawn from China-led
multilateral groups and announced vaccine donations to Taiwan.
But despite the tensions that have been building for a while, bilateral trade was on a smooth and upward ride for the last couple of years.
Shen Zhifei, the recalled ambassador extraordinary and plenipotentiary
of the People's Republic of China to Lithuania, recently told The Baltic Times that Lithuanian companies exported 300,000+ tonnes of wheat to China in 2019 worth $52.3mn, and again in 2020 worth $75mn. Beef exports in 2020 were 472.1 tonnes worth $2.1mn.
Other agricultural products exported to China in 2020 include 7,739.5 tonnes of dairy products. Broken down into
the major categories this comprised 271.6 tonnes of canned milk, 1,044 tonnes of cheese, 994 tonnes of milk sugar (lactose), 4,302.4 tonnes of whey powder, 362 tonnes of milk powder, 563.3 tonnes of milk permeate and 202 tonnes of cheese products. Lithuania also exported 625.3 tonnes of fish and fishery products and 425.7 tonnes of feedstuff.
But now Lithuanian Transport Minister Marius Skuodis says he has indications that rising tensions between Vilnius and Beijing might lead to a drop in rail freight volumes with China.
"We have indications on potential impact on rail freight volumes, but I would not want to elaborate. If we look in general, the ties are fairly weak, compared
to other countries and those freight