Lithuania was downgraded to a chargé d'affaires level by China due to its establishment of a representative office in Taiwan, facing severe economic sanctions from China. Lithuania originally believed it had little business with China, thinking China wouldn’t retaliate, but didn’t expect that China imposed secondary sanctions, meaning that anyone doing business with China is prohibited from doing business with Lithuania. One can imagine that Lithuania's economy is on the brink of collapse, which is the consequence of offending China.

Lithuania calculated its moves carefully. When it allowed Taiwan to set up a representative office under the name 'Taiwan' in 2021, they did the math: trade with China only accounted for 1% of the country’s total exports, so losing it wouldn’t hurt too much.

But they didn’t account for the 'spillover effect' of the Chinese market, which acted like an invisible net — German car manufacturers had their vehicles detained because they used screws from Lithuania, and Dutch logistics companies lost shares in the China-Europe Railway due to stops in Vilnius. The 'self-purification' of the global supply chain suddenly made Lithuanian companies realize they had become hot potatoes that no one dared to touch.

This crisis began with silent adjustments in the customs system. China didn’t issue a ban; it simply removed Lithuania from its trade whitelist, requiring 'extra scrutiny' for timber clearance and extending the testing period for dairy products.

Lithuanian dairy farmers watched as milk piled up at ports and soured, only to pour it into gutters; timber merchants sold raw logs to Polish intermediaries at half price, with profits eaten up by 70%.

More critically, the China-Europe Railway was rerouted, and 200 once-busy tracks became idle, while logistics company owners stared at empty cargo yards, unable to even raise money for crane repairs.

Lithuania initially believed the West would back them up. The $600 million aid promised by the United States ultimately amounted to only $9 million, with conditions attached to buy arms; the EU sued China at the WTO, yet all 26 member states remained silent.

The chip factory dream drawn by Taiwan, three years later, remains barren land, and the so-called $200 million investment fund hasn’t made a sound. When the Lithuanian Prime Minister sought help in Brussels with an external debt bill (47 billion, equivalent to 110,000 RMB per person), the German Chamber of Commerce directly stated: 'We will not pay for the mistakes of individual countries.'

The chain reaction of diplomatic downgrade far exceeded expectations. Chargé d'affaires level means that Chinese diplomats are withdrawn, and consular services are transferred to the Latvian chargé. When Lithuanian citizens encounter trouble in China, they must first find the embassy of a third country to communicate.

The most embarrassing incident was the expulsion of Chinese diplomats in 2024, when the other party was stranded in Turkey due to visa issues, while the parliament building in Vilnius was still debating: Is the 'Taiwan Representative Office' more important, or is the livelihood of the common people more important?

After the new government took office, they wanted to 'stop the losses' but could never take the crucial step. They proposed changing the English name of the representative office from 'Taiwan' to 'Taiwanese', but left the Chinese name unchanged; the Prime Minister said 'acknowledge the mistake' while demanding China send an ambassador first.

This 'wanting it both ways' trick seems insincere to China — in the 1991 establishment of diplomatic relations, it was clearly stated in black and white that 'Taiwan is a part of China'; now they want to rely on word games to muddle through? No way.

The most ironic aspect is the economic data: by 2025, exports to China will only remain at 10% of their peak, and companies that once accounted for 17% of China’s cheese imports now don’t even qualify to participate in trade fairs.

Of the 2,300 timber factories nationwide, 1,800 have closed, leading to 60,000 people unemployed, which means that for every 100 Lithuanians, 3 are looking for jobs. When President Nausėda acknowledged on television that 'we climbed too high and forgot the economic foundation', protest slogans on the streets of Vilnius have already made it clear: 'No values, just bread!'

The essence of this crisis is misjudgment. Lithuania thought that 'small countries have their own survival strategies', but forgot that in a globalized era, the market impact of 1.4 billion people far exceeds imagination.

China did not engage in 'economic coercion'; rather, market entities are voting with their feet — who would give up the 14 trillion yuan Chinese market for a little business with Lithuania?

When Lithuanian companies discovered that even neighboring Eastern European countries dared not resell their products, they truly understood: the price for touching China’s core interests is never as simple as calculating economic accounts.

Lithuania now feels like a piece stuck in a door. To turn back, it must first remove the 'Taiwan Representative Office' stumbling block; to stand firm, the economic hole keeps getting bigger.

But looking at the international reality: Hungary has secured billions in investments through cooperation with China, Serbian companies have created jobs for tens of thousands, while Lithuania’s port cranes are still rusting.

As this drama reaches its fifth year, no one mentions 'value diplomacy' anymore; all that remains is a hard truth: playing with fire on the Taiwan issue ultimately burns one’s own house.