Continental in the crosshairs of China feud with Lithuania

VILNIUS/FRANKFURT – China is pressuring German motor vehicle parts giant Continental to cease employing components manufactured in Lithuania, two folks familiar with the make a difference told Reuters, amid a dispute concerning Beijing and the Baltic state in excess of the status of Taiwan.

The targeting of Continental is an instance of how the China-Lithuania diplomatic spat is spilling over into business enterprise in an period of world-wide offer chains and influencing Germany’s vehicle sector, a lucrative pillar of Europe’s largest overall economy.

The Chinese federal government, which sights self-ruled Taiwan as its territory, downgraded diplomatic ties with Lithuania previous thirty day period just after the opening of a agent business office by Taiwan in Vilnius. Lithuania’s ruling coalition had also agreed very last calendar year to help what it described as “all those fighting for freedom” on the island.

Continental, one particular of the world’s premier motor vehicle components maker, has manufacturing amenities in Lithuania, earning digital elements this kind of as controllers for vehicle doors and seats, and exports to clients globally like China.

Continental, which materials all of Germany’s massive automakers, declined to comment on regardless of whether it experienced been asked by the Chinese govt to reduce links with Lithuania.

China’s overseas ministry denied that Beijing had pressured multinational businesses not to use Lithuanian-made parts nevertheless mentioned its companies no lengthier trusted Lithuania.

“The apply of ‘one China, a single Taiwan’ grossly interferes in China’s internal affairs and seriously violates China’s core interests,” a spokesperson added.

“I listened to that a lot of Chinese companies no longer regard Lithuania as a reliable partner,” the spokesperson said. “Lithuania has to glance at alone for the purpose why Lithuanian companies are facing challenges in trade and financial cooperation in China.”

China has pressured international locations to downgrade or sever their relations with democratically governed Taiwan. Previously this month, a senior formal and an marketplace overall body mentioned China had explained to multinationals to sever ties with Lithuania or experience remaining shut out of the Chinese marketplace.

Lithuania’s direct trade with China is modest, but its export-based mostly financial state is home to hundreds of organizations that make products and solutions these kinds of as home furniture, lasers, food stuff and apparel for multinationals that provide to China.

Lithuania’s foreign office said: “Providers working in Lithuania have correctly integrated them selves into intercontinental supply chains, so China’s economic pressure steps may well result in numerous disruptions to firms running in Lithuania.”

“We intently keep track of, analyse and examine each individual these types of scenario, such as amongst these German businesses,” said the spokesperson, including that it was “hunting for extensive-term sustainable methods and methods to resume trade flows with China”.

(Writing By John O’Donnell Further reporting by Yew Lun Tian in Beijing Modifying by Pravin Char)