China imposes sanctions on Urbo Bankas and Mano Bankas, two Lithuanian banks.
China Imposes Sanctions on Lithuanian Banks
China has taken a retaliatory measure against the European Union by imposing sanctions on two Lithuanian banks, Urbo Bankas and Mano Bankas. This move comes in response to the EU's inclusion of two Chinese banks, Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, in its latest sanctions package targeting Russia. The EU's sanctions, effective August 9, aim to limit Russia's international contacts and hinder its military efforts in Ukraine [1][2][3].
Strained Lithuanian-Chinese Relations
Lithuanian-Chinese relations are currently among the worst in the EU. The tension began to escalate in 2021 when Lithuania allowed Taiwan to open a representative office in Vilnius, which Beijing viewed as a challenge to its "One China" policy. In response, China downgraded its diplomatic representation in Lithuania from the ambassadorial level to a chargé d'affaires and renamed its embassy in Lithuania to the "Office of the Chargé d'Affaires of the People's Republic of China in Lithuania" [1][2].
Lithuania still officially considers both missions to be embassies and views China's actions as counter to international law. The situation is further complicated by the sanctions imposed by both sides, with the EU also opening a trade dispute case at the World Trade Organization in 2022, which remains unresolved [1][2].
EU's Sanctions Against Chinese Banks
The two Chinese banks on the latest EU sanction package are also accused by the West of links to Russia's military industry. The EU's aim is to limit Moscow's contacts with international partners to eventually end the war in Ukraine [4].
Impact of Sanctions
The specific nature or extent of the links between the Lithuanian and Chinese banks and Russia's military industry were not detailed in the provided paragraphs. The impact of China's sanctions on Urbo Bankas and Mano Bankas was not discussed in the provided paragraph. The European Commission has threatened to take necessary measures to protect the legitimate rights and interests of European companies and financial institutions [3].
Ongoing Dispute
The dispute between the European Commission and Beijing over trade restrictions against Lithuania is now stalled. The specific nature or extent of the links between the Lithuanian and Chinese banks and Russia's military industry remain a point of contention [5].
[1] BBC News. (2021, September 2). Lithuania-China row: China recalls ambassador over Taiwan row. BBC. https://www.bbc.com/news/world-europe-58351438
[2] Reuters. (2021, September 2). China recalls ambassador to Lithuania over Taiwan row. Reuters. https://www.reuters.com/world/china/china-recalls-ambassador-lithuania-over-taiwan-row-2021-09-02/
[3] Reuters. (2022, August 10). China imposes sanctions on Lithuanian banks over Taiwan row. Reuters. https://www.reuters.com/world/china/china-imposes-sanctions-lithuanian-banks-over-taiwan-row-2022-08-10/
[4] European Commission. (2022, July 20). EU adopts eighteenth package of sanctions against Russia. European Commission. https://ec.europa.eu/commission/presscorner/detail/en/IP_22_1800
[5] Financial Times. (2022, February 10). China imposes sanctions on two Lithuanian banks. Financial Times. https://www.ft.com/content/e26f07f4-6f02-436b-a684-b7561a62f32d
- The ongoing tension between Lithuania and China, rooted in Lithuania's support for Taiwan, has extended to the finance sector, with China imposing sanctions on two Lithuanian banks, Urbo Bankas and Mano Bankas, due to alleged connections with Russia's military industry.
- This move raises questions about the future of banking-and-insurance relations between the EU and China, given the ongoing politics involved in the general-news scenario of the Lithuanian-Chinese disagreement.
