China’s sanctions regime and Lithuania: Policy responses for European institutions

Under the backdrop of shifting Sino-European relations, the deterioration of Sino-Lithuanian relations came to a head in 2020. In April that year, about 200 Lithuanian politicians expressed to the country's president their desire for the government to support Taiwan’s involvement in the World Health Organization. Closer informal diplomatic relations between Lithuania and Taiwan led to Lithuania’s desire to pull out of the 17+1 China-Central and Eastern European Countries Cooperation framework, and allow Taiwan to open a representative office in Vilnius using the name “Taiwan” instead of “Taipei.” In reaction, China launched its most comprehensive sanctions regime against an individual country to date.

Through a series of questions divided into two parts, this report examines how the Chinese government sanctioned Lithuania and used secondary sanctions in service of their geopolitical goals. The first part of this report explains the actions of the Chinese government and the second part explains the EU’s use of the Anti-Coercion Instrument to blunt future economic punitive actions against the European Common Market. The third section provides four policy recommendations to European leaders on how to respond to future instances of economic coercion by large countries like China.