In the midst of a dispute with China, Taiwan is establishing a $200 million Lithuania fund

Image credit: Goad News

As it tries to ward off Chinese diplomatic and trade pressure on Lithuania, Taiwan has announced the establishment of a $200 million (£148 million) fund to invest in the Baltic state.

Taipei has said that it intends to make its first investment later this year, with cash guaranteed by the Taiwanese government’s central bank and national development fund.

It comes after Lithuania permitted Taiwan to open a de facto embassy there, indicating that the two countries’ connections are deepening.

After purchasing 20,000 bottles of Lithuanian rum bound for China, Taiwan is sharing advice with the public on how to consume and cook with rum.

According to state-run media, Taiwan Tobacco and Liquor Corporation purchased the rum after learning that it would be banned from entering China. China has denied blocking trade from Lithuania, claiming that doing so would violate international trade rules. However, the European Union has confirmed reports of goods being held up at Chinese customs.

Although China accounts for only 1% of Lithuania’s exports, the issue with rum imports is the most recent case alleged to have impacted Lithuanian enterprises.

The new office is called Taiwan, rather than Chinese Taipei, as many other countries have done to avoid hurting China.

The opening of a new Taiwanese office in Lithuania does not imply official diplomatic connections, but it might be interpreted as an indication of strengthening ties between the two countries. It was the island’s first new diplomatic representation in Europe in 18 years. Taiwan has only a few formal allies as a result of China’s pressure.

Lithuania affirmed its right to have relations with Taiwan while also stating that it adhered to the “One China” policy.

The “One China policy” refers to diplomatic support of China’s declaration that there is only one Chinese government. Even though Taiwan is a self-governing democratic state, Beijing believes it to be part of its territory. In recent years, it has upped the pressure on the island to isolate it from its international allies.