China has wiped out an entire country with a “drastic” trade embargo. It has been dubbed “childish”, but it does not bode well for Australia.
After two years of tearing down Australia to no result, China has a new target for its economic outrage: a little Lithuania.
at the end of the week, Lithuanian exporter Found something strange.
when it comes to doing business China, it was as if they no longer existed. China’s customs system was simply rejecting every attempt at contact.
Lithuania, a small Baltic nation of about 2.8 million people, was hoping for a response.
After all, it had expressed concern over alleged spying by some of China’s leading international firms. and it was opened a representative office with Taiwan last month,
All these steps were to anger China. But provoking a complete trade embargo?
“This is unprecedented,” says Dr. Jeffrey Wilson, director of research at the Perth USAA Center. “Outside wartime conditions, the absolute trade restrictions are exceptionally rare – think North Korea, US-Iran sanctions etc. This delisting is – in fact – the most severe trade sanctions that the PRC can impose. It has never done this before.”
Australia thought it was bad. But it hasn’t faced a complete business blackout.
thirteen high value itemsFrom seafood and beef to coal and wine, entry into China has been banned. But not iron ore or gas.
Overall, about one-fourth of Australia’s total exports go to China. For Lithuania, it is about one percent.
And that’s what’s so strange about this drastic step by Beijing. The international backlash against it is likely to be far more damaging to itself than any economic pain inflicted on Lithuania’s capital Vilnius.
hammer vs egg shell
“This tells us that China is in no mood to de-escalate after trying and fail with australia, ” Dr. Wilson told news.com.au ton on Monday. “They haven’t learned a lesson from us. Instead, they are getting even tougher against Lithuania. And that’s a bad sign for the rest of the world because of the global warming.” Trade is a global problem.”
Lithuania is not the only other country facing Beijing’s economic wrath. Others include Japan, the Philippines, Taiwan, South Korea, Norway, Canada and Mongolia.
“Not that it’s the first time. It’s not the second time. It’s happened nine times. Not that these reactions can be written off as one-offs,” says Dr. Wilson. “The issue is, can China really cross one country off the global economic map and still be a member of the World Trade Organization? Can the rest of the world be calm with this? And can China continue to do so? “
Norway halted its salmon exports. The Philippines had crushed its banana trade. Taiwanese pineapples have been returned.
Even Australia, which has angered China over calls for an investigation into the origins of COVID-19 and increasingly open support for Taiwan, has not faced a complete trade blackout.
Lithuanian Foreign Minister Gabrielus Landsbergis He said this week he would seek assistance from the European Commission on “undeclared sanctions”.
Its exports, including wood and furniture, are halted at ports. He says this is because Lithuania no longer exists on China’s electronic customs declaration system.
“It’s kind of childish,” Dr. Wilson says. “They’ve basically already banned all trade with Lithuania anyway. So it’s like removing your exes’ number from your phone and blocking them. It’s purely to get growth, and by the way It also has no real effect.”
May be this is correct?
China is the world’s second largest economy and the world’s largest exporter. Beijing knows that this benefits it greatly.
However, Lithuania has other ideas.
Less than 1 percent of Lithuania’s exports go to China. Finance Minister Gintare Scheiste says the trade restrictions will have “no fundamental impact” on its economy.
And Lithuania was threatened.
The tiny state’s Baltic ports have long been the subject of the will of Russia and President Vladimir Putin. It has faced almost daily threats from its neighbor since its separation from the Soviet Union in 1990.
Carnegie Moscow analyst Denis Kishinevsky says: Vilnius is gearing up to win the support of the West.
“Vilnius now regards criticism of Beijing as one of the most effective forms of defense against Moscow,” he says. “It combines a politics of values, anti-communism, the pursuit of Washington’s focus on the region, and the desire to transcend the narrow circle of Russia’s eternal critic.
“Ultimately, the United States is ready to support Lithuania in its efforts: the Baltic state can help push the old EU countries towards more anti-Chinese positions, along with an acid test to see if could act as a measure of how far Beijing is prepared to go. A response to harsh criticism and coaxing Taiwan.”
Vilnius is the only European country to host a representative office of Taiwan. This is a leg that Beijing cannot stand.
So he withdrew his ambassador to Lithuania last month. It then downgraded the ties to a simple char d’affaires.
“In the short term, it is painful for any country when your contracts are cut,” Foreign Minister Landsbergis said. “But it is short-lived because the market is favorable. Companies adapt.”
of smoke and mirrors
Beijing has yet to issue any official comment on the trade embargo. But the outspoken Communist Party controlled Global Times Denies any such restriction. like.
“a Global Times The investigation … found that Lithuanian products are still listed in official customs systems as of Sunday, which is contrary to some media reports,” reads an editorial.
“But in light of rising risks, Chinese traders and industry insiders are diversifying their import sources after reducing or halting trade with Lithuania to address potential risks posed by political tensions. Chinese officials said this It has also said that Lithuania will pay the price for its mistake of challenging China’s sovereignty.
“That’s what DoubleSpeak is all about. It’s designed to be impossible to turn your head around,” Wilson says. ‘Sanctions? How did you accuse us of banning?’
At issue is Beijing’s business conduct, its membership of a rules-based global trading system, and how other members react when “basic rules are so brazenly ignored”.
“Time will tell,” says Dr Wilson, adding that Beijing’s behavior does not bode well for the future of trade relations with Australia.
“China drew a lot of international criticism for what it did to Australia. And it couldn’t achieve its goals because Australia didn’t back down,” he said this morning. “Some of us might have hope that Beijing must have learned a lesson from it, stopped doing that and tried to find a way to calm things down. But no. Now they’ve gone and done something far more ridiculously illegal and childish. ,
Jamie Seidel is a freelance writer. @JamieSeidel