Illustration: Aïda Amer/Axios
The Chinese government is demanding that multinational firms cut ties with Lithuania or else lose access to China's markets, after the Baltic state allowed Taiwan to open an unofficial representative's office there.
Why it matters: Beijing is beginning to implement a de facto sanctions regime to enforce its geopolitical interests around the globe.
The big picture: Though China's pressure lacks the global heft of U.S. financial sanctions, China's economy has become so large that many companies, and countries, see it as vital — making denial of access to that market a serious threat.
- Unlike U.S. sanctions, which are publicly announced de jure sanctions typically enacted to uphold multilateral principles such as countering weapons proliferation and funding for terrorism, China's unfolding sanctions regime is opaque and usually deployed to uphold its narrow political interests.
What's happening: Lithuanian government officials and industry representatives told Reuters that China was pressuring multinational firms that do business with China to cut Lithuanian products out of their supply chains.
- German car company Continental, which has facilities in Lithuania and sells parts to China, is one company that has faced direct pressure from China, according to Reuters.
- Lithuania's diplomats and their families (and at least one cat) evacuated China last week after authorities demanded they turn in their diplomatic IDs, raising fears that Beijing might strip them of immunity.
What to watch: The European Commission has said it may take the issue to the World Trade Organization.
Go deeper: Lithuania's deputy foreign minister on nation's "realistic" approach to China