Taiwan – risks of engagement

China punishes countries willing to forge relations with Taiwan. When Lithuania allowed Taiwan to open a Representative Office under the name Taiwan in November 2021 – a de-facto embassy -, China‘s Communist Party’s reaction followed swiftly. The “Economist“ commented it to be the worst diplomatic crisis in decades between China and an EU country and entailed Lithuania withdrawing all of its diplomatic personnel from Beijing. The small Baltic country which used to be a member of the 17+1 initiative until May 2021 also faced economic consequences. Chinese investments in Lithuania stopped, Lithuania’s name was deleted from Chinese customs databases, which may also have wide-ranging implications for supply chains within the EU Single Market as Chinese customs restrictions have also been applied to some products containing Lithuanian components being imported from other European countries.
It is thus not only a conflict between China and a single European country but touches upon three questions: What is the EU’s position towards Taiwan? What are the political repercussions of China’s economic leverage in some EU countries that are dependent on Chinese investments? What tools does the EU have to counter economic coercion against one of its members?