Lithuania’s Turn Away from China’s 17+1 and towards Taiwan: A Signal of Policy Recalibration in Central and Eastern Europe

Lithuania’s Turn Away from China’s 17+1 and towards Taiwan: A Signal of Policy Recalibration in Central and Eastern Europe

Lithuania’s Turn Away from China’s 17+1 and towards Taiwan: A Signal of Policy Recalibration in Central and Eastern Europe

On March 2, news reports revealed that Lithuania plans to leave the 17+1 Initiative—an economic cooperation framework spearheaded by the People’s Republic of China (PRC), which involves 17 Central and Eastern European (CEE) countries (12 EU members and 5 Western Balkan states). Justifying the decision, Lithuanian officials cited a lack of results and benefits reached through the initiative since its inception nearly 10 years ago. Media outlets have since updated this information—clarifying that the Baltic nation is not officially withdrawing from the group, but intends instead to minimize its participation. It has also been revealed that Lithuania plans to set up a trade office in Taiwan this year, and that a group of prominent Lithuanians established the “Lithuania-Taiwan Forum” on March 16. This, along with the sparse attendance at February’s 17+1 virtual meeting, indicates a growing frustration with the China-led framework among CEE nations—and potentially provides an opening for deepening ties with alternative, democratic economic partners such as Taiwan.

Lithuania’s Near-Break Up with 17+1

The question of scaling down Lithuania’s participation in 17+1 was reportedly discussed in February 2021 in connection to debates on reconsidering the country’s approach to China. Initially, media outlets indicated that Lithuania’s parliamentary Committee on Foreign Affairs had decided on “leaving” the 17+1 format, preferring instead to work with “democratic partners in the region.” Subsequent reports clarified that Lithuania was not formally leaving the group; but that from now on, it would prefer “direct or European Union (EU)-led economic ties to participating in a China-led ‘17+1’ grouping with Central European countries.” The spokesperson for the Lithuanian Foreign Ministry explained the decision:

In our opinion, the economic initiative did not bring the expected result to Lithuania, so we plan to concentrate on developing our economic relationship with China bilaterally, and within the framework of EU and China cooperation.

The lack of economic benefits, however, has turned out to be only one of several reasons for this decision. “The 17+1 format […] is not useful for Europe, it is dividing Europe, because some countries have a different opinion on China than others,” Lithuanian Foreign Minister Gabrielius Landsbergis said in the days following the announcement—thereby indicating that aside from economic considerations, there was a significant political dimension to the decision. The question of the EU’s cohesion and the impact of the 17+1 format on EU policies toward China has been cited as a growing concern.

Furthermore, Lithuania’s decision to turn its back on China appears to be connected with the controversial China-EU Comprehensive Agreement on Investment (CAI), concluded on December 30, 2020, just days before the end of Germany’s presidency of the Council of the EU. In February—at roughly the same time that this policy shift was being debated in the Lithuanian parliament—media reports described growing discontent in Lithuania’s political circles regarding the fairness of the largest EU countries, Germany and France, speaking on behalf of the entire Union. This provides an interesting insight into the significance of the hotly discussed CAI as well, showing that the agreement—although considered a victory for China—by no means represents the wishes of all EU member states.

Perhaps most notably, the chairman of Lithuania’s parliamentary Committee on Foreign Affairs, Žygimantas Pavilionis, has indicated in an interview that Lithuania is not the only 17+1 member with such concerns, stating that Estonia, Latvia, and several other Eastern European countries are considering a similar move. If true, this would indicate that the concerns outlined above are perhaps shared by a significant part of Central and Eastern Europe, thus signaling a larger trend rather than an issue limited to a single country.

2020: A Year of Strengthening Ties with Taiwan

On March 3, just one day after Lithuania announced its intention to redirect its focus away from the 17+1, the Baltic nation publicized its plan to bolster its ties with Taiwan by establishing a trade office in Taipei. The move is meant to “boost economic diplomacy in Asia,“ while keeping in line with the aforementioned statements by Lithuanian officials pledging to work with more democratic partners. Up until now, Riga—Latvia’s capital—has been the only Baltic city to host Taiwan’s representative office, which has served to promote relations with all three Baltic countries: Estonia, Latvia, and Lithuania.

In hindsight, these developments may be viewed as a natural progression in the growing Lithuanian support for Taiwan, and intensifying ties between the two democracies. In April 2020, over 200 Lithuanian politicians and public figures issued an open letter to Lithuanian President Gitanas Nausėda calling on him to support Taiwan in its efforts to join the World Health Organization (WHO). Subsequently, the nation’s then-foreign minister called the WHO, asking that Taiwan be invited as an observer. In October 2020, 60 Lithuanian parliamentarians joined fellow European lawmakers in supporting Taiwan’s inclusion in the World Health Assembly (WHA). Building on this, Lithuanian Taiwan supporters also celebrated Taiwan’s National Day in Vilnius for the first time on October 8. Following the October 2020 elections, the newly formed Lithuanian government pledged to carry out a “values-based foreign policy,” oppose human rights violations, and “defend those fighting for freedom around the world, from Belarus to Taiwan.“ To this end, the Provisional Parliamentary Group for Relations with the Republic of China (Taiwan), consisting of 32 parliamentarians, was formed at the end of 2020.

Most recently, over 50 Lithuanian politicians and professors established the “Lithuania-Taiwan Forum” on March 16, 2021 in Vilnius, paving the way for deepening Lithuania-Taiwan cooperation and exchanges, as well as supporting “Taiwan’s aspirations related to democracy, human rights, and self-determination.“ (According to earlier reports, the founding act of the forum had already been signed by its members in October 2020.) The forum includes many prominent Lithuanian figures, such as the current Minister of the Economy and Innovation Aušrinė Armonaitė, Vice Foreign Affairs Minister Mantas Adomėnas, the Mayor of Lithuania’s capital Vilnius Remigijus Šimašius, Lithuanian Member of the European Parliament Aušra Maldeikienė, as well as a number of legislators and university professors. The group will be led by former Minister of Education and Science Gintaras Steponavičius, who said that the forum would further promote Lithuania’s “value-based“ foreign policy and help develop relations with Taiwan in “various fields.“

In the area of research and scientific cooperation, Taiwan has also been active in the Baltics. For instance, the Baltic States Research Center on Physics, inaugurated in March 2020, will further promote bilateral exchanges between the scientific communities in Taiwan and the Baltics.

Interestingly, the idea of switching formal relations from the PRC to Taiwan was brought up last year by one Lithuanian politician, who pointed out the fact that China has little to no leverage in the Baltic nation. Still, the Lithuanian government as a whole has shown no clear intention to either change its policy of recognizing only one “China,” or to or pursue formal ties with the island democracy.

Growing Frustrations with the 17+1 among CEE Countries

The news about Lithuania’s rethinking of its relationship with the PRC and Taiwan came shortly after the much-delayed February 9 virtual meeting of the 17+1 grouping. Chinese Communist Party General Secretary Xi Jinping (習近平) himself chaired this year’s meeting—instead of Prime Minister Li Keqiang (李克強), who would usually host such a meeting—and pledged to import goods worth over USD $170 billion from the region over the next five years. Despite this, many CEE nations chose to downgrade their participation in the online meeting. Of the seventeen CEE member nations, six countries chose not to send their leaders, with ministers participating on their behalf. Notably, the top leaders of all three Baltic states chose to skip the meeting, along with those of Bulgaria, Romania, and Slovenia.

The 17+1 Initiative has long been criticized due to its asymmetrical, horizontal structure, which allows the PRC to foster bilateral ties with individual members of the group—as opposed to a standard horizontal organization, would allow and encourage multilateral engagement between all members. In other words, the framework allows the 17 European nations to have one-on-one dealings with China (which tend to be competitive in nature), but it does not enable them to pursue a joint strategy vis-à-vis Beijing. The format is also known for its lack of mutuality, with China setting the timing and agenda of the meetings. Additionally, many have pointed out that the 17+1 (and CEE, for that matter) is a very diverse group of nations—both in terms of the size of their economies as well as “political identities”—resulting in unbalanced trade relations and differences in the degrees of participation within the framework. The 17+1 has been perceived as a tool of the PRC, serving to increase its influence in Eastern Europe and acting as a virtual extension of China’s Belt and Road Initiative (BRI, also known as One Belt, One Road [一帶一路]).

After nearly a decade of unkept promises of investment and infrastructure (often complemented with a carrot-and-sticks approach in the region), it is no wonder that the members of the group have become disillusioned with the initiative and suspicious of its true motives. Frank Juris of the International Center for Defense and Security was recently quoted explaining that the increasingly realistic approach toward China and 17+1 is present throughout the wider region, not only the Baltics. Indeed, a growing number of national intelligence services are sounding alarms about the national security risks that China poses to Europe: including those of Lithuania, Estonia, the Czech Republic, and many more. Some members—and especially Baltic nations—also feel that there is a political cost to participation in the grouping, as it could potentially harm relations with the United States, which is considered a “security guarantor” in the region.

Implications for CEE-Taiwan Ties

The news of Lithuania’s shift away from the 17+1 and toward Taiwan marks the first time that a CEE country publicly expressed its frustration with the China-led initiative while almost simultaneously announcing measures that strengthen its ties with Taiwan. The two decisions appear to reflect two coinciding, and often connected trends: first, a frustration and growing skepticism towards China’s (mostly unfulfilled) investment promises and the 17+1 framework; and second, an increasing willingness among some European countries to forge “value-based” partnerships with like-minded democratic nations, including Taiwan. It also shows that many European nations—particularly those with a history of being bullied by authoritarian regimes like Russia, and which are, as a result, keener on upholding values such as freedom, democracy and human rights, and more inclined to feel sympathy for Taiwan—are increasingly aware of the risks posed by China’s influence in Europe and its ambitions to create divisions between the United States and Europe, as well as within the EU.

It is yet to be seen whether this growing distrust in the promises of 17+1 is strictly limited to the six nations whose leaders skipped the meeting this year, or whether this is indicative of the approaching dissolution of the 17+1 altogether. But given how outspoken politicians in Lithuania have become on this issue, it would be worthwhile to look out for similar signs and rhetoric in other member states. This is particularly true for Taiwan, for which these signs can represent an opening and opportunity for cooperation.

Furthermore, if there truly is a considerable number of CEE nations sharing Lithuania’s sentiment, this may create a possibility for a more coordinated approach to China, as well as to Taiwan. While many European states will likely remain open to Chinese investment and its attendant influence, increased coordination among CEE countries could greatly increase their leverage. A united approach by a group of CEE countries may well be able to fend off retaliation from China and render its threats unconvincing, thus creating a more equitable environment in dealings with China. For similar reasons, this shift may be an important development for the prospects of EU-wide and transatlantic cooperation on China-related issues. If Europe is becoming more united on China, this may increase the feasibility of a more coordinated transatlantic approach on issues such as Taiwan.

There is one more important implication for those observing the developments in Europe from the outside: as a growing number of CEE nations become skeptical of Chinese trade and investment opportunities, Taiwan and the United States (as the PRC’s systemic rival and a nation that is trying to encourage other countries’ ties with Taiwan, as per the TAIPEI Act) should pay attention and offer alternatives to those countries seeking to diversify their trade and investment portfolios. Only with alternatives to choose from will CEE nations that are seeking to bolster cooperation with like-minded democracies be able to do so.

The main point: Lithuania’s decision to scale down its participation in the 17+1 group and set up a trade office in Taiwan are signs of growing skepticism with the China-led initiative, as well as a turn to a more “value-based” foreign policy. The waning interest among 17+1 members in the meetings and insiders’ insights indicate that more Central and East European states may follow suit, providing an opening for Taiwan.