China's Foreign Ministry has announced that it will downgrade diplomatic ties with the country of Lithuania to the level of 'charge d'affairs' after Lithuania allowed Taiwan to open a 'Representative Office' in the country last week. In August, the Chinese government had withdrawn their ambassador to Lithuania in protest over the move to open the Taiwanese office, as it claims Taiwan as a part of the Republic and does not recognise it as a separate country.
"We urge the Lithuanian side to correct its mistakes immediately and not to underestimate the Chinese people's firm determination and staunch resolve to defend national sovereignty and territorial integrity," the Foreign Ministry was quoted as saying by Reuters, adding that The move "undermined China's sovereignty and territorial integrity, and grossly interfered in China's internal affairs", creating a "bad precedent internationally".
However, Lithuania has received the tacit backing of the US which, in August, had vowed to aid it against any kind of Chinese coercion as per a statement made by US Secretary of State Anthony Blinken to Lithuanian Foreign Minister Gabrielius Landsbergis. Lithuania will sign a $600 million export credit agreement with the U.S. Export-Import Bank next week, Economy Minister Ausrine Armonaite told Reuters.
Lithuania said earlier this year it would no longer participate in a Beijing-led trade grouping with Central European countries. China has also said that it will not hesitate to retaliate appropriately depending on the actions taken by the country.
Shortly after the Taiwanese Representative office opened on Thursday, Landsbergis said Lithuania would appreciate greater support from the European Union in order to withstand pressure from China. This would most probably include measures such as rearranging supply chains and reducing financial dependence on China in case of retaliation through those routes.