From Unfulfilled Promises to Realized Fears?
While “bigger” countries in Europe and the EU are struggling with finding a new China policy, the Baltic states have approached China with a curious mix of independence and engagement.
- China has longlasting interest in the Baltic states considering its massive domestic requirements and the region’s oft-underappreciated comparative advantages.
- Unfulfilled promises of Sino-Baltic economic cooperation on both bilateral and multilateral levels have gradually led to disillusionment with China, underscored by China’s growing assertiveness.
- The Baltic example of societal resilience to Chinese advances is a remarkable aspect, deriving from the trio’s forced experience of Soviet communist rule.
- The Baltic states have the surprising advantage of being a latecomer, as the region has not yet entered into any kind of irreparable inter-dependence relations with Beijing.
By almost any single measure and delimitation effort, the Baltic states (sub)region is perhaps the smallest in Europe. From north to south composed of Estonia, Latvia, and Lithuania (with only the latter two being predominantly Baltic in an ethno-linguistic sense), its total size roughly amounts to only 6 million in population, 175,000 sq. km in area, and 110€ billion in nominal GDP. Largely due to its complex modern history, this region is remarkably supportive of both the European Union (EU) and the United States (U.S.) on the one hand, and inherently sceptical of communist authoritarianism on the other. It is therefore curious that China has recently become not only interested but also relatively active in the Baltic trio.
Having established official diplomatic relations with Tallinn, Riga, and Vilnius soon after they became the first ones to break free from the Soviet Union in the early 1990s, Beijing attached little importance to the region the following two decades, despite the outgoing president Jiang Zemin’s brief visit to all of the respective capitals in mid-2002. This pattern began to change some ten years later, as the trio was invited to participate in the then 16+1 format of Cooperation between China and Central and Eastern European Countries (CEEC; the forum recently expanded to 17 partners in Europe with the curious accession of Greece that has no clear-cut association with either the communist past or the region in question). Much less enthusiastic about both the prospects for massive Chinese investments than their neighbours in Central Europe and the Balkans as well as the actual inclusion into such a group of countries to begin with, the Balts accepted the offer mainly to “wait and see”, since even the slightest opportunities brought by such a decision seemed to clearly outweigh the costs back then.
Yet after some testing of waters, Sino-Baltic relations at the end of 2020 seem to be more tenuous than ever. This article examines this increasingly complex relationship, with particular emphasis on developments in recent years – years in which China and the Baltics have made advances toward each other, but in which the Baltic trio has maintained surprising independence. It updates and augments the author’s previous research on this topic, conducted individually and collectively as a member of the Prague-based China Observers in Central and Eastern Europe (CHOICE) multinational consortium of experts. It gives somewhat more attention to Lithuania due to its comparatively larger size, the author’s personal knowledge of this case, and, most importantly, China’s recent attempt to involve itself in domestic issues there, which is unprecedented in the region. What are Beijing’s interests in this small, northerly corner of Europe – and how has the trio handled them?
China’s Interests in the Baltic State
Although China is well-known for the secrecy of its foreign-policy making, including the lack of public access to its most important official documents, numerous academic sources and practical instances of Chinese foreign policy-making in qualitatively similar countries worldwide, would suggest several interrelated reasons behind Beijing’s interest in the Baltic States.
The Chinese leadership might be concerned with knowing more about the region that played a crucial role in the Soviet disintegration in order to prevent a similar scenario from happening in the People’s Republic itself.
Perhaps more controversially, the so-called Xinjiang Papers leaked in November 2019 suggest that the Chinese leadership might be concerned with knowing more about the region that played a crucial role in the Soviet disintegration in order to prevent a similar scenario from happening in the People’s Republic itself. Notably, while presenting and vindicating a security crackdown in Xinjiang to his Chinese Communist Party (CCP) colleagues Xi Jinping himself recognized this factor as he noticed that “[t]he Baltic republics were among the most developed in the Soviet Union, but also the first to leave when the country broke up.” One would thus expect a certain interest not only in the story of Baltic liberation from the communist rule but also their subsequent socio-economic and political development.
Moreover, Chinese attention to the Baltic states could also be explained by their belonging to even larger multinational entities. As a great power, traditionally mistrustful of multilateral initiatives and security alliances, particularly Western ones, China has increasingly been blamed of targeting the soft underbelly of both the EU and NATO and pursuing long-term “divide and rule” tactics on the European and even Euro-Atlantic dimensions. In any case, the Baltic states’ geographical position in the middle of the continent, directly bordering with China’s two important non-Western strategic partners (Belarus and Russia), and membership in both of the most-powerful Western multilateral structures, as well as the increasingly relevant Nordic-Baltic and Baltic Sea transnational initiatives, would at least suggest Chinese economic and political interest in accessing the developed markets and normative communities in the European macro-region through yet another group of its actors. The alleged coupling of long-term complex security and developmental imperatives explains Beijing’s attention to the Baltic states’ critical, particularly transportation, infrastructure as part of its famed Belt and Road Initiative (BRI) that besides other things primarily aims to physically connect both ends of Eurasia.
Lastly, Beijing is interested in affecting the Baltic states’ public discourse and international diplomatic activism related to sensitive topics that it deems to be purely domestic and thus off-limits to foreign countries. Although the problem of Tibet has long ago become an uncomfortable, but essentially habitual part of the respective bilateral agendas, Estonian, Latvian and Lithuanian diplomats, politicians and public activists have recently made statements on China’s other so-called “core interests” and human rights abuses in reaction to its escalatory policies in most of those cases. From Beijing’s perspective, projection of its so-called soft power of non-coercive appeal and cooptation thus serves as one of the vehicles to deal with this problem and more broadly aims to increase China’s general popularity in a region that is known for its principled anti-communist stance.
Before the 2019–2020 Downgrade
It is of no surprise that relatively identical Chinese interests in each of the Baltic States have eventually led to rather similar outcomes, although significant differences could also be witnessed, particularly before the outbreak of the COVID-19 pandemic. To begin with, it seems to be rather hard to tell outright which of the Baltic actors has been most forthcoming to Beijing in general.
Judging from the pattern of their participation in the 17+1 platform, it was the geographically centremost Latvia that clearly stood out. Indeed, Riga remains to be the only regional capital to have hosted the forum’s summit meeting (2016) thus far, attracting the sole Chinese prime ministerial visit to the Baltics and securing the right to host the format’s first permanent institution in the trio, namely the CEEC–China Secretariat on Logistics Cooperation, as a result. On the other hand, despite being the only Baltic state to always be represented by its prime minister in the summits thus far, Estonia is also the one to be least mentioned in their foremost resulting documents, the Guidelines, thus somewhat signifying the lack of Chinese attention. Finally, the Lithuanian prime minister has only skipped one summit meeting sending in his stead the country’s minister of finance. Such an unusual choice was motivated by Lithuania’s ambitions to become a European financial technology (fintech) gateway for China, supported by its pledge to establish a 17+1 Fintech Coordination Centre and conduct the format’s High-Level Fintech Forum in 2019. Curiously, a mere 17+1 “network of fintech coordinators” was actually set up during the Forum in Vilnius, probably as a result of the below-mentioned China-related controversies in the country.
Another way to judge the level of the Baltic states’ willingness to upgrade the relationship in question has to do with their position on the so-called “core interests” of China. Ever since the Dalai Lama became one of the first personalities of global prominence and renown to congratulate Lithuanians with re-gaining their independence in 1990, the issue of Tibet has gradually become a hurdle in the trio’s bilateral agendas with Beijing. Moreover, many Lithuanians would associate their experience during the Soviet occupation with that of the Tibetans and other restive minorities ruled by the Chinese communists. It is no wonder then that the Tibetan spiritual leader remained a relatively regular visitor to the region, attracting not only impressive crowds but also the attention of politicians. In the early 2010s Beijing began to more seriously punish the Balts for their leaders’ meetings with the Dalai Lama by effectively freezing the official relations on economic matters for several years.
The mid-term results of such actions, clearly within the remit of what is usually described as economic statecraft, were plainly seen in autumn 2018. All of the Baltic presidents came to China, the Estonian and Latvian presidents in order to attend the so-called Summer Davos Forum in Tianjin, while the Lithuanian president to launch the Trade and Investment Forum in Shanghai. Notably, the Latvian and Lithuanian visits proved to be possible at least partly due to the presidents’ decisions not to meet the visiting Dalai Lama several months earlier. The change of heart was especially remarkable in the case of Dalia Grybauskaitė, as the Lithuanian head of state was the only of the three to have actually met the Tibetan spiritual leader while in office (though in “private capacity”) during his previous arrival back in 2013.
Nevertheless, soon after the presidential journeys to China, the “core interests” and human rights components of the relationship began to acquire qualitatively novel characteristics, with Xinjiang suddenly becoming the crucial juncture. In mid-November 2018, the Estonian ambassador to Beijing joined 14 other Western colleagues by signing a letter that requested a meeting with the de facto head of China’s largest and most restive province in order to explain the ongoing security crackdown there. In the mid-2019, both Latvia and Lithuania joined Estonia and a growing list of other Western countries in the Xinjiang-related global “war of letters”. The new document, co-signed by 22 ambassadors to the UN, called on Beijing to respect human rights and fundamental freedoms in Xinjiang by refraining from the arbitrary detention and restrictions on freedom of movement of Uyghurs and other Muslim and minority communities there. Tellingly, the three Baltic states were the only representatives of the 17+1 platform among the signatories. The trio remained committed to the human rights agenda, and participated in two subsequent initiatives in 2019 and 2020 that were even wider in terms of both the signatories and topics. Since the recent impact of the other two sensitive “core interests”, namely Hong Kong and Taiwan, on the Sino-Baltic relationship will be addressed below while dealing with the 2019 and 2020 setbacks respectively, the next logical step is to evaluate the actual level of their economic cooperation.
The Unfulfilled Promises
In general, the latest pre-pandemic data on Sino-Baltic bilateral trade and investment suggests large room for improvement. According to the comprehensive China–CEEC relations audit, the Sino–Baltic trade pattern is characterized by several common features: a pretty rapid increase in the 2010s that started from a very low base and had to do mainly with a jump in imports from China, thus widening the trade deficit; predominance of electrical and industrial machinery and textiles in Chinese exports to the region; and a much larger variety of the Baltic exports (and re-exports) to China, ranging from essentially natural resources (minerals, metals, and especially wood and related articles) to industrial machinery and high-tech equipment. Notably, the Balts’ common, and somewhat competitive, goal of opening the Chinese market to their famed dairy, meat, grain, and fish products has yet to be fully achieved.
Much more telling is the remarkable increase of the Baltic tech exports to China. Electronic equipment makes up almost a third of what the Chinese import from Estonia. Throughout the five years leading up to 2019, Lithuanian exports of high-tech products to China grew 7.4 times to more than €22 million, securing it a fourth position below only the U.S., Germany, and the Netherlands in 2018. 74% of that volume was comprised of lasers, as China had already emerged as the largest market for the Lithuanian laser producers since 2016, and accounted for 29% of their exports in 2018. Despite such instances and the seemingly significant position of China as the top Asian trade partner for the trio, total Sino-Baltic trade figures remain way below both their potential and expectations, failing to reach a modest figure of 4€ billion. To take the region’s largest economy as an example, the total volume of Sino-Lithuanian bilateral trade had finally passed the symbolically important mark of 1€ billion only in 2017. Despite the fact that immediately before the pandemic Lithuanian exports to China had grown faster than imports from it, a huge trade imbalance (277€ vs. 929€ million respectively in 2019) remained an issue in their economic relationship. An officially designated priority destination for the country’s exports, China took a lowly 20th position among Lithuania’s export partners (17th in overall trade ensured by being 10th in imports).
Although China’s lasting interest in critical infrastructure has caught the attention of Baltic elites and the general public particularly, the actual outcomes might be described as not only negligible but also somewhat counterproductive. For instance, persistent Chinese attention to Lithuania’s only seaport in Klaipėda (formerly Memel) and the region-wide Rail Baltica project contributed to the Parliament’s decision to adopt an updated version of the original 2002 Law on the Protection of Objects of Importance to Ensuring National Security in early 2018; thus further strengthening one of the most powerful foreign investment screening mechanisms in Europe. Despite hosting the above-mentioned CEEC–China Secretariat on Logistics Cooperation, Latvia has not registered substantial breakthroughs in this sphere either. Likewise, the much discussed Chinese participation in the construction of the Helsinki–Tallinn underseas rail tunnel is difficult to imagine for this project’s quintessential security component and “white elephant” characteristics that are particularly acute in these financially and politically trying times.
Tellingly, none of the Baltic states has become a member of the Beijing-based Asian Infrastructure Investment Bank, and both Lithuania and Estonia (along with Slovenia) were the last CEEC to sign a memorandum of understanding on jointly building the BRI in 2017. The volte-face in this sphere was perhaps most clearly enshrined with Tallinn’s landmark October 2019 decision to issue a joint declaration with the U.S. to strengthen cooperation on 5G security and development; in effect restricting the use of Chinese mobile technology. Both Riga and Vilnius followed suit in February and September 2020 respectively. Meanwhile, Estonia passed a set of amendments for telecom security reviews or the so-called “Huawei law” that also declined to mention either the target country or its companies explicitly.
The Securitization of Relations: Lithuanian Case Study
Except for some residual elements of the Soviet-era China scare, perception of it as a relevant security challenge is relatively novel for the Baltic states. It is Beijing’s expanding security cooperation with Russia and Belarus that had increasingly attracted the region’s attention before 2019. Particularly the mid-2017 joint Sino-Russian naval drills in the Baltic Sea, the first such instance ever, were interpreted as a significant wake-up call, despite the same Chinese naval ships’ friendly port call in Riga afterwards. It took almost two years for those fears to be expressed openly.
In February 2019, Lithuanian intelligence bodies, for the first time in the Baltics, plainly identified China’s espionage activities as a threat to the country’s national security, adding it to the two usual suspects of Russia and Belarus. The National Threat Assessment 2019 underscored the “increasing aggressiveness of Chinese intelligence and security services’ activities” in Lithuania and explicitly named China’s Ministry of State Security and military intelligence as the two services operating in the country. The document noted that such activities are driven by Beijing’s domestic policy issues, particularly silencing Lithuania on Tibet and Taiwan, but also aiming at broader interests, including “Lithuanian foreign policy and economy, the defence sector, information accessible to Lithuanian citizens about foreign countries’ international cooperation projects and future plans with China.” Despite the expected Chinese outrage, subsequent Estonian and Latvian assessments essentially confirmed the Lithuanian position.
What followed next was akin to a self-fulfilling prophecy. On August 23, 2019 the trio commemorated the 30th anniversary of the Baltic Way, one of the world’s largest ever peaceful political demonstrations and a key event in these countries’ liberation story.
The eventful day took a rather unexpected turn when several hundreds of Lithuanians that joined hands in solidarity with the protesters in Hong Kong were confronted by a small, but vocal group of pro-Beijing counter-demonstrators in downtown Vilnius. At around the same time in Hong Kong, an estimated 210,000 people formed their own “Hong Kong Way” spanning some 60 km as part of the ongoing anti-extradition law protests in the city. The connection between those two events was not coincidental, as the alleged author of the latter’s idea was an anonymous Tallinn-based Hong Kong start-up entrepreneur, who explicitly named the Baltic Way as an inspiration. It needs to be noted that this was not the first time that the 1989 events in the Baltic republics were linked with China. Back in 2004, an approximately 2 million-strong and 500 km-long pro-independence 228 Hand-in-Hand rally in Taiwan was also inspired by the trios’ prior example.
The incident in Vilnius proved to be a qualitatively novel development, as it marked the first time that pro-Beijing demonstrators expressed themselves openly in Lithuania and the whole Baltic region. Even more importantly, none other than the Chinese ambassador to the country personally observed from the side-lines and directed the counter-protesting group. As a result of the commotion, two Chinese citizens were briefly detained by Lithuanian police and fined 15€ each for disturbing the public order during the event, and the ambassador himself was summoned to explain the situation. The Chinese embassy denied any involvement in a comment sent to one of Lithuania’s main news agencies. It stressed the spontaneous character of the counter-protest and expressed strong hopes that “such events tarnishing the Chinese government will not happen again in the future.” This was not the end of the larger story, however.
A month and a half after the actual incident, a seminal investigative media article confirmed the August 23 allegations, providing footage that depicted members of the Chinese diplomatic staff, including the ambassador, the defence attaché, his deputy, and the second secretary of the embassy, preparing for and/or actually participating in the commotion. Although the embassy’s role was unprecedented, the composition of the rest of the counter-protesting group provided even more interesting clues into China’s activities in the country. As the author of this article more elaborately argues in another piece, the August 23 incident highlighted the role of the so-called Chinese “united front work” in the country.
Indeed, one could logically trace the confirmed participation of such diasporic organizations as the Overseas Chinese Association of Lithuania and the Chinese Chamber of Commerce in the commotion to a low-profile May visit of You Quan, the Head of the United Front Work Department (UFWD), i.e. the Party’s main agency tasked with influencing the Chinese living abroad and the countries that host them. Although there are no publicly available indications that You’s trip to Vilnius included meetings with the local Chinese community, this is precisely what one would expect considering his principal remit, as well as previous visits by his internationally more famous colleagues. Thus, meetings with Lithuanian officials arguably served as window-dressing to conceal the real priority of the journey. This is not to suggest that the UFWD would not be interested in establishing and deepening relationships between the CCP and Lithuanian political parties, especially considering that it is precisely its original function, and that neighbouring Latvia has already provided a role model since its significant Social Democratic Party “Harmony” (Saskaņa) signed a controversial memorandum of cooperation with the CCP in 2011.
Sadly, the already difficult year in Sino-Lithuanian relations ended with another Hong Kong-connected incident that touched upon the seemingly most innocent part of bilateral cooperation. Although incoming Chinese tourism has recently become an untold success story in the Sino-Baltic relationship, with a particularly steady growth registered in Estonia and Lithuania, one of some 21,000 Chinese people who visited the latter country in 2019 produced an obnoxious incident during which several crosses supporting the Hong Kong protests were defaced or thrown out at the Hill of Crosses, a globally unique religious site that many Lithuanians would see as representing their identity. A negative trend for the 2020 relationship with China had thus been set in the Baltic states in general and Lithuania in particular.