"China targets Lithuania!"

On August 13, China announced sanctions against two EU entities. The German newspaper "Handelsblatt" stated that this move was a response to the EU's sanctions against it for allegedly allowing Chinese financial institutions to provide cryptocurrency services to Russia. This is a retaliatory measure taken by China using tools from its countermeasures arsenal against the EU. In response, the EU has also made a new reaction.

The two Lithuanian banks sanctioned by the Chinese Ministry of Commerce are UAB Urbo Bankas and AB Mano Bankas. Chinese institutions and individuals are prohibited from conducting transactions or cooperating with these two banks. The Ministry of Commerce stated that the EU's measures violate international law and have damaged Sino-European economic and financial relations.

Sino-European Economic Ties

This move came after the EU imposed sanctions on two Chinese financial institutions on July 18. In its 18th round of sanctions against Russia, Brussels included these two institutions. The sanctions marked the first time the EU took action against a third country that provided loans to Russia.

EU High Representative for Foreign Affairs and Security Policy Kaja Kallas said at the time: "We are exerting more pressure on Russia's military industry, Chinese banks that help circumvent sanctions, and preventing the export of drone technology."

Report by Handelsblatt

According to diplomatic sources, Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank—two regional banks located near the China-Russia border—were listed in the EU's 18th round of sanctions against Russia.

Since the outbreak of the Ukraine conflict, the EU has added dozens of mainland Chinese companies and Hong Kong companies to its blacklist. The EU accuses these companies of delivering goods on the EU's sanctions list to Russian buyers with military connections.

UAB Urbo Bankas Bank

Last year, after the United States authorized secondary sanctions against overseas financial companies assisting Russia's war efforts, some Chinese state-owned banks tightened financing restrictions for Russian clients.

According to Bloomberg, the two Lithuanian banks sanctioned by China do not have large-scale operations in China. Marius Arlauskas, CEO of UAB Urbo Bankas, stated that the bank does not conduct business in China. AB Mano Bankas also confirmed that it does not have active operations in China. The sanctions will not affect its daily operations.

This indicates that China has chosen symbolic targets rather than economically damaging ones. After all, the EU is one of China's most important export destinations. Trade conflicts between the two sides would be detrimental to both. At the same time, China has given the EU an opportunity to reflect.

AB Mano Bankas Bank

However, the sanctions against Lithuania carry significant diplomatic significance!

Der Spiegel commented that Beijing's choice of Lithuanian banks reflects ongoing diplomatic tensions. After Lithuania allowed the Chinese Taipei to establish a representative office in Vilnius, China lowered the level of bilateral relations. The German Institute for Economic Research stated that China's trade restrictions on this Baltic country are not purely a bilateral issue, but also affect the EU internal market and its value chains.

According to Reuters, the Lithuanian government sees China's strategic partnership with Russia as a threat. Lithuania has also taken action against the products of the booming Chinese solar industry on grounds of security concerns. Lithuanian President Gitanas Nausėda called on the EU to continue litigation against China at the WTO in January this year, and said that actions that might suspend the litigation are causing dissatisfaction in the US.

Meanwhile, the bank sanctions further increase the economic pressure on Lithuania. At the same time, Taiwan is part of China. China will not allow any other country to attempt to "split" China. According to Handelsblatt, experts believe this is a continuous conflict around international alliances and trade routes.

Lithuanian President Gitanas Nausėda

After China issued a statement on sanctions with symbolic meaning and strong diplomatic significance, the EU immediately responded.

The European Commission stated on the 13th that it would review China's actions before deciding on the next steps. EU spokesperson Olof Gill emphasized that Brussels still wants to seek a solution acceptable to both sides. The EU is maintaining communication with the entities sanctioned by China. Obviously, China's counter-sanctions have had a good effect, and the EU has expressed a positive response.

The Chinese Ministry of Commerce called on the EU to correct its "improper behavior" and avoid further damage to Chinese interests. It can be said that through counter-sanctions, China has kicked the ball back to the EU, urging the EU to make the right choice.

Original: https://www.toutiao.com/article/7538423133309518388/

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