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Monday 23.07.2018 | Name days: Magda, Magone, Mērija

Will China be Lithuania’s new Russia?

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULinas Jegelevičius for the BNN

Can China ever replace Russia as Lithuania’s trading partner? With the Russian retaliatory sanctions in place, some sectors of the Lithuanian economy have been shaken as the firms is search for new, often yet unchartered markets.

China would be a lucrative market, but the Chinese do not rush to welcome Lithuania, as Lithuanian foreign policy is often not favoured by Beijing.

Chinese frown at Lithuanian politics

Chinese consumers already sip Lithuanian mineral water, champagne, savour gourmet food, Lithuanian cheese, for example, but it has just recently muscled its way onto the Chinese shelves. Can Lithuania boost its trade with China? Most importantly, can it, without repudiating political support for the Chinese territories pursuing breakaway from the mainland, make deeper inroads in the huge Asian economy?

In general, China and Lithuania have been getting closer in recent years, but the mutual shoulder-tapping could have been much warmer if not for – well, to tell it without the political correctness – the Tibetan leader, Dalai Lama, whom the Lithuanian top political echelon, with President Dalia Grybauskaitė upfront, has been passionately embracing.

No wonder- Lithuania is well cognizant of its hard-fought independence, so the encouraging others seeking independence- well, except the Palestine – has long been on the country leaders’ political agenda.

Still, against the backdrop, can the Asian giant, China is, and the world economy’s minnow, Lithuania, find any common ground when it comes to trade?

«Lithuanian business’ attempts to ramp up trade between the two countries are discernible and noticed by many. But frankly, very rarely behind the dialogue stands state authorizes. Unfortunately, the politics has been derailing it often. Had not Lithuanian top officials, including our President, met Dalai Lama in 2013, Lithuanian dairy and meat exporters would have been shipping tons of the goods by now. That is an overwhelming notion in the sectors,» Osvaldas Čiukšys, Chairman of the Lithuanian- Chinese Business Council (LCBC), told BNN.

Deal was about to signed

The deal on a Lithuanian and Chinese trade package had been nearly ready in 2013 – high-ranking Chinese delegation, paying visit to the Lithuanian capital Vilnius in 2013, were sharpening pens at the table, but in a twist of irony, the Lithuanian Presidential Palace welcomed cordially visiting Dalai Lama during the same days.

Lithuania’s quest to support other nations fighting for independence is understandable, but the Chinese backed away from the signing,

«Indeed, we were about to work out a deal then, which included reconciliation of the two countries’ different veterinary standards, a must-to-do thing in opening China’s meat and dairy market. But the Tibetan leader’s visit has thwarted all our work. I am not saying the Tibetan notable has to be ignored when in Lithuania, but if the country’s Foreign Ministry and the Presidential Palace want Lithuanian business to strike an accord with China, then they have to rethink much, » Remigijus Žemaitaitis, a MP and member of the parliamentary group for Lithuanian and Chinese collaboration, told BNN.

Despite the setback, the Social-Democrats-led Lithuanian Government is set to expand in 2015 its diplomatic and economic presence not only in China, but also Kazakhstan and Turkey. Besides, new Lithuanian diplomatic representation offices are said to be opened in South Africa and Los Angeles, the United States. After the lift of the ban in the Lithuanian Parliament on ritual slaughter of livestock, the country has planned from 2015 to export beef to Israel, Kuwait and some other Middle East countries.

But, sure, none of them can measure up China.

Big expectations from Chinese market

Economics has become for Russia a tool of the geopolitical weapon and, so in the West’s standoff with Russia, hundreds of Lithuanian entrepreneurs rave of sneaking in China to buffer the harsh fallout from the Russian embargo. China with its markets’ enormity and the astonishing economy growth is definitely a No 1 country on the Lithuanian businessmen’s export priority list.

Some of them, in fact, already have already muscled their way in the Asian giant and are reaping the fruits of the collaboration.

The story of JSC Ekspla, a laser technologies Lithuanian company, which was the first Lithuanian high-tech company to have made inroads in Chinese market, could be encouragement for others who seek larger waters and greener pastures elsewhere. The Lithuanian Laser Association, by the way, has signed recently a collaboration agreement with a corresponding association in China.

Yet the Lithuanian agro companies, if given green light in China, could see a whirlwind unravelling in the Asian market. But granting certificates meaning that they are up to the Chinese veterinary requirements and quality has stalled, and few doubts the procrastination is not about the economics, but politics.

«As a matter of fact, the certificates are ready and gathering dust in the drawers. The Chinese we speak often to say our attempts in opening China markets are quite visible, but they hint that the punishment for the diplomatic shenanigans a few years ago has to last longer,» the LCBC head told.

Chinese seek new business partners

Although tensions are still in the air, but Ina Marčiulionytė, director of the Asian and Oceanic Department at the Lithuanian Ministry of Foreign Affairs, says Chinese high-ranking officials and Chinese PM Li Keqiang, who last December met Eastern and Central European countries’ prime ministers, including Lithuania’s PM Butkevičius, and other heavy-weights in Serbia, where the« China+16» meeting took place, showed interest in Lithuania.

«In the meeting, the Chinese premier told he believes that both countries (China and Lithuania) can move to a new phase of relations, and continue collaborating further. The diplomatic work has never stopped and, apparently, it starts giving some fruits. We have received export permits for Hon Kong last year. We have also filled out the Chinese questionnaires regarding export cattle, grains and haylage. Certificates for fish production went into effect in 2012. We really expect that the process will be moving forwards. Though we have some hopeful news from China, I don’t want to predict when the diary and meat export to China certificates will be issued, but I think we will not have to wait long,» Marčiulionytė told Delfi, a Lithuanian news site.

Lithuanian officials note that the Chinese have spearheaded the «China+16» meeting in bid to attract more foreign investments in China, as well as spur cultural exchanges and tourism.

As many as roughly 100 Lithuanian businessmen are said to have contacted Lithuanian Commerce attaché in Beijing in 2014, inquiring mostly of business contacts in China and seeking consultations.

A Lithuanian PM’s advisor insisted after the «China +16» meeting that it has put Lithuania close to China as never before and, importantly, both countries, from now on, should be rubbing their elbow at the business crossroads more often now.

Čiukšys, of LCBC, also believes that Lithuania will succeed in mending the economic fences and improving them rather sooner than later.

«We will succeed in any way, but no one can expect that China is like Sweden or Germany, with which many things with a business partner can be sorted and straightened out through e-mail. In China, one needs lots of time to spend creating personal relations. Our business people often complain that they have to drive, dine and have supper a lot and, disappointingly to many, no one rushes to speak about the business during supper. Their culture and mentality is obviously other. It is necessary to understand that and learn how to speak to them, » Čiukšys told.

Deal expected to be signed this year

He told BNN he expects the Chinese authorities will nod to Lithuanian dairy and meat producers this year.

«If something extraordinary will not happen,» he noted. «The ready paperwork has been gathering dust for a year and a half now.»

Marčiulionytė, of the Foreign Ministry, agrees that no country «opens up» very quickly, and the tangible results can be felt only in two or three years since an agreement is signed.

«Especially when it comes to China, which tends to protect its market very well and, therefore, the process can last from several months to a half-year and longer,» she noted.

According to the LCBC chairman, China for Lithuania could be a very good Russia’s replacement; especially that it is not only enormous, but also stable, a lot more stable than Russia’s.

«The politic regime in China is firm, economy is strong and, to some estimate, in 2030, around 40 percent of the world’s middle class will belong to China. It is really compulsory to penetrate Chinese markets and take advantage of the possibilities they give,» Čiukšys insisted.

Importantly, he noted, Lithuanian business should not be restricting itself only with exports of butter of cheese to the Asian giant.

«Many European countries and their companies have chosen other way: moving there their entire business models and production. I believe that should be the ultimate pursuit for our business mulling expansion to China. We should be manufacturing high quality goods on Chinese soil, as transporting them from here would be too expensive,» Chairman of the Lithuanian- Chinese Business Council believes.

Undemocratic regimes cannot be welcome

Jolita Vaičkienė, a Lithuanian parliamentarian and member of the Lithuanian and Chinese inter-parliamentary group, agreed that politics often gets on the way of economics.

«And I reckon the case of Lithuanian and Chinese relations is not an exception…As Lithuanian President and Ministry of Foreign relations are the primary institutions tasked with formation of country’s foreign policy, they are certainly the first ones to be accountable for what is happening in the relations- any relations,» the MP told BNN.

Asked whether Lithuanian state officials should be embracing Tibetan or Taiwanese representatives, or should be avoiding cheesing off China, the legislator said she does not want to comment it, but then insisted she did not have opinion on the issue.

Kęstutis Masiulis, a Conservative Lithuanian legislator, emphasized to BNN that in non-democratic countries, like China, economy depends on the politics and can be used for political purposes.

«Therefore, the countries that deal with undemocratic regimes must be aware of the threat. Lithuanian politicians, as well as businessmen have experience when it comes to that, because they have been harmed by the Russian authorities. Hence, my advice for the businessmen who trade with China would be this: do have some other alternative markets, too…Lithuania should be making efforts to improve the mutual ties, but has to remain faithful to values of democracy, as well as the Christian values,» Masiulis told.

He says if Taiwan and Tibet want to secede, China should not keep them as its territories forcefully.

But deliberations and discussions about that have to democratic, free and well thought-out, insisted the parliamentarian.

«We have seen that kind of debates in the UK over the Scottish determination, for example,» he said.

Ref: 020/

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