ECONOMY

Central and eastern Europe turn to Taiwan as China relations cool

Taiwan updates

Ruta chocolate may be little known outside Lithuania. But in Taiwan, it has become all the rage.

Since the Baltic state announced in March that it would open a representative office in Taipei — a level below official diplomatic representation but an indicator of deepening relations — Taiwanese credit card holders have bought NT$2.5bn (US$90m) worth of Lithuanian products. The tiny country has become the seventh-largest market for Taiwan’s online shoppers.

The infatuation with Lithuanian fare is just one sign of a newfound love between Taiwan and central and eastern European countries. The Baltic state, Poland, the Czech Republic and Slovakia have all donated Covid-19 vaccines to Taipei in recent months — the only EU member states to do so. Taiwan’s chief economic planner is also due to lead a 65-strong investment delegation to three of the four countries in October.

The warming relations come as governments reconsider their links with China, after hopes of economic benefits from co-operation gave way to fears of domination by an authoritarian superpower.

“Because China set up the 17+1, there were very high expectations,” said Justyna Szczudlik, a China analyst at the Polish Institute of International Affairs think-tank, referring to a group Beijing established for dealing with central and eastern European countries. “But gradually we realised that this partnership does not bear fruit and China’s outreach was largely PR.”

A study of European views on China published last year by Palacký University Olomouc and the Central European Institute of Asian Studies think-tank found that Serbia and Latvia were the only central and eastern European countries with predominantly positive views. In the Czech Republic, the country where sentiment was most hostile, 56 per cent of respondents had negative attitudes towards Beijing and 41 per cent said their views had worsened in the past three years. 

Chinese president Xi Jinping, left, met with his Czech counterpart Milos Zeman in 2016, when the countries were looking to deepen relations. Public opinion in the Czech Republic has now turned significantly more hostile towards Beijing © Filip Singer/EPA/Shutterstock

Disillusionment over economic opportunities is one reason. Poland sought closer relations with China in 2008, hoping for an economic boost following the global financial crisis. Warsaw was also worried that it was overdependent on European markets and faced decreasing funding from the EU. But the enthusiasm started to wane when it became clear that Beijing intended to use its economic clout to build influence and there were few economic gains.

A series of events have raised concerns, according to Szczudlik. These include: Beijing’s Made in China 2025 plan to make the country self-sufficient in core industries such as semiconductors; the hostile takeover of German robotics company Kuka by Chinese investors in 2016; and the Belt and Road Initiative, Beijing’s infrastructure-building programme which has left partner countries heavily indebted. “We saw that they want access to critical infrastructure, and that in investment projects they seek control,” she said.

Concerns are even stronger in the political realm. For many central and eastern European countries, liberation from Soviet occupation or domination in 1989 is an essential part of their identity. The older generation views China warily because Beijing initiated a bloody crackdown on the Tiananmen Square protests at the same time that they were escaping foreign domination.

For the same reason, the region is watching China’s increasingly close ties to Russia with alarm. The two countries’ 2017 joint naval exercise in the Baltic Sea came “as a shock to Poland”, said Szczudlik.

Lithuania withdrew from the 17+1 group in May. Gitanas Nauseda, the country’s president, recently told the Financial Times Vilnius wanted to have relations with China “based on the principle of mutual respect” and insisted that it was “free” to decide with whom it co-operated. “This should not bring additional tensions,” he added.

Gitanas Nauseda, Lituania’s president
Lithuania has been most vocal in hardening its stance towards China. Gitanas Nauseda, Lituania’s president, said the country wanted relations with Beijing based on ‘mutual respect’ rather than ‘unilateral ultimatums’ © Dursun Aydemir/Anadolu/Bloomberg

For the Baltic states, it has also become a matter of principle to support young and small democracies after Iceland was the first country to recognise their independence from the Soviet Union in 1990.

“We had the big support of a small country very far from Lithuania. Iceland recognised our independence, and showed to the world that values and principles still mean a lot in this time,” Nauseda said.

Lithuania has been most vocal in hardening its stance towards China. Following its decision to establish mutual representative offices with Taiwan, the country is now in a full-blown spat with China, with Vilnius and Beijing recalling their ambassadors.

Lithuania’s parliament has also adopted resolutions critical of China, including one that censured Beijing’s policies in Xinjiang, where millions of ethnic Uyghurs have allegedly been rounded up in mass interment camps, and another calling for a ban on Chinese technology group Huawei.

Estonia and Latvia have made it clear they would prefer the EU to take the lead in relations with China. “We have to think about the coming decades and how we can balance this assertive ambition as China wants to become a superpower,” Marko Mihkelson, chair of the Estonian parliament’s foreign affairs committee, said this month. He added that the now 16+1 format had not worked well and more “common action” from the EU would be better.

But experts believe that a swift unravelling of the grouping is unlikely.

Martin Hala, founder and director of Sinopsis, an online platform for analysis about China backed by Charles University in Prague, said it “was easier to join in 2012 than it is now to leave”.

“The lesson from Beijing’s sable rattling against Lithuania will be for countries to try and leave collectively, rather than individually,” he added. “But that may prove difficult to co-ordinate.”

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