China pressuring German car parts giant Continental to cut links with Lithuania, sources say

It comes amid an escalating dispute between Beijing and the Baltic nation over the status of Taiwan

Beijing denies multinationals have been pressured, but says many Chinese firms ‘no longer regard Lithuania as a trustworthy partner’

2-MIN READ2-MIN

German firm Continental is one of the world’s largest car parts makers and has production facilities in Lithuania. Photo: Reuters

Published: 8:24pm, 17 Dec 2021

China is pressuring German car parts giant Continental to stop using components made in Lithuania, two people familiar with the matter told Reuters, amid a dispute between Beijing and the Baltic state over the status of Taiwan.

The targeting of Continental is an example of how the China-Lithuania diplomatic spat is spilling over into business in an era of global supply chains and affecting Germany’s car industry, a lucrative pillar of Europe’s biggest economy.

The Chinese government, which views self-ruled Taiwan as its territory, downgraded diplomatic ties with Lithuania last month after the opening of a representative office by Taiwan in Vilnius. Lithuania’s ruling coalition had also agreed last year to support what it described as “those fighting for freedom” on the island.

Beijing downgraded diplomatic ties with Lithuania last month after Taiwan opened a representative office in Vilnius. Photo: EPA-EFE

Continental, one of the world’s largest car parts makers, has production facilities in Lithuania, making electronic parts such as controllers for vehicle doors and seats, and exports to clients globally including China.

Continental, which supplies all of Germany’s big carmakers, declined to comment on whether it had been asked by the Chinese government to cut links with Lithuania.

China’s foreign ministry denied that Beijing had pressured multinational companies not to use Lithuanian-produced parts though said its companies no longer trusted Lithuania.

“The practice of ‘one China, one Taiwan’ grossly interferes in China’s internal affairs and seriously violates China’s core interests,” a spokesperson added.