China announced retaliatory sanctions against two Lithuanian banks on Wednesday (13 August), marking an escalation in tensions following the European Union's inclusion of Chinese financial institutions in its latest Russia sanctions package.
In a statement signed by the Chinese minister of commerce, Wang Wentao, the ministry announced sanctions against Lithuanian AB Mano Bankas and UAB Urbo Bankas with immediate effect.
The countermeasures prohibit all Chinese organisations and individuals from conducting transactions, cooperation, or other business activities with the sanctioned Lithuanian institutions.
The Chinese action follows the EU's 18th round of sanctions against Russia, announced on 18 July, which added two Chinese financial institutions — Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank — to its sanctions list.
It was the first time Chinese businessess were directly included, and on Wednesday Beijing characterised the European measures as a "serious violation of international law and basic norms governing international relations" that damaged the “legitimate rights and interests of Chinese enterprises.”
Minister of commerce Wang authorised the sanctions under China's Anti-Foreign Sanctions Law, with approval from the State Anti-Foreign Sanctions Coordination Mechanism.
The decision represents Beijing's continued push to protect Chinese businesses from what it views as unlawful foreign sanctions.
The targeting of Lithuanian banks specifically appears strategic, given Lithuania's vocal criticism of China's policies and its support for Taiwan. Lithuania's relations with China started to sour in 2021 after both countries opened unofficial representative offices in each other's capitals.
Lithuania announced the establishment of a "Taiwanese Representative Office" in 2021, prompting a fierce diplomatic and economic backlash from China.
Since then, Beijing has pressured Lithuania in various ways, with diplomatic ties reduced to the chargé d'affaires level and both countries' embassies remaining closed.
Following Lithuania's autumn 2024 elections, the new government in Vilnius had made reestablishing and normalising relations with China a foreign policy priority.
But Wednesday’s sanctions will further strain the relationship.
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Wester is a journalist from the Netherlands with a focus on the green economy. He joined EUobserver in September 2021. Previously he was editor-in-chief of Vice, Motherboard, a science-based website, and climate economy journalist for The Correspondent.
Wester is a journalist from the Netherlands with a focus on the green economy. He joined EUobserver in September 2021. Previously he was editor-in-chief of Vice, Motherboard, a science-based website, and climate economy journalist for The Correspondent.