Enlarge image
Continental plant in Hanover (archive picture)
Photo: imago stock & people / imago images / teutopress
According to a report, auto supplier Continental is being dragged into China's dispute with Lithuania over the Taiwan issue.
The company from Hanover had been asked by the People's Republic to stop the use of components manufactured in the EU country Lithuania, the Reuters news agency quoted two people familiar with the matter.
"Continental is getting threatening signals that deliveries from the Lithuanian factory to China are no longer allowed," said one of the insiders.
The world's third largest automotive supplier, which manufactures electronic components in its factory in Kaunas 100 kilometers west of the Lithuanian capital Vilnius, did not want to comment on the politically tense situation.
In business circles it was said that other companies had difficulties with their supply chains because of China's ban on Lithuania.
Up to a dozen companies, mainly from the automotive and agricultural sectors, are affected.
Attempts are made on all channels to solve the problem.
"Talks are taking place, both from politics and business."
According to Reuters information, a meeting will take place next week in the Ministry of Economic Affairs on impending trade problems due to the Chinese boycott against EU partner Lithuania.
In the business world there is increasing concern that German-Chinese trade could also be impaired by the incorporation of parts made in Lithuania into products, according to participants.
EU examines complaint to WTO
In Brussels it was said that the EU Commission could involve the World Trade Organization (WTO) because of the dispute between China and Lithuania. "We are examining steps at the WTO and an official complaint to the WTO," said a spokesman for the commission. In theory, other steps are also possible. The Commission has been in contact with Vilnius and the EU delegation in Beijing for some time to clarify the situation.
Meanwhile, the Chinese Foreign Ministry denied having put pressure on multinational corporations not to use products made in Lithuania. However, it criticized Lithuania for its stance on Taiwan. Chinese companies did not consider Lithuania a trustworthy partner. By viewing Taiwan as a separate country, the country is interfering in domestic affairs and violating China's core interests, a foreign ministry spokesman said.
According to data from Lithuanian trade associations, China is blocking imports of goods from the country. A China-based businessman told US news company Politico that Beijing is pressuring EU companies to stop importing Lithuanian products. In the past few days, components from two German companies in the auto industry have been stopped in Chinese ports because they were manufactured in Lithuania. It could be years before some of these components could be replaced by alternative suppliers.
The background to this is a worsening dispute over the decision of the Baltic state to allow Taiwan to open a de facto embassy.
China regards the island as part of the People's Republic.
Chinese customs officials no longer include Lithuania in their list of countries of origin, the president of the industry association, Vidmantas Janulevicius, complained in early December.
Therefore, customs forms cannot be submitted for loads from Lithuania.
China has already downgraded its diplomatic relations with the Baltic state and suspended consular services there after the Taiwanese representative office opened in Lithuania in mid-November.
dab / Reuters