Identifier
Created
Classification
Origin
05VILNIUS1023
2005-09-27 13:19:00
CONFIDENTIAL
Embassy Vilnius
Cable title:  

CHINA,S RELATIONSHIP WITH LITHUANIA: FORM OVER

Tags:  PREL CH LH 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 VILNIUS 001023 

SIPDIS

STATE FOR EUR/NB AND INR

E.O. 12958: DECL: 09/26/2015
TAGS: PREL CH LH
SUBJECT: CHINA,S RELATIONSHIP WITH LITHUANIA: FORM OVER
SUBSTANCE - FOR NOW


Classified By: Political/Economic Officer Alexander Titolo for reasons
1.4 (b) and (d).

-------
SUMMARY
-------

C O N F I D E N T I A L SECTION 01 OF 03 VILNIUS 001023

SIPDIS

STATE FOR EUR/NB AND INR

E.O. 12958: DECL: 09/26/2015
TAGS: PREL CH LH
SUBJECT: CHINA,S RELATIONSHIP WITH LITHUANIA: FORM OVER
SUBSTANCE - FOR NOW


Classified By: Political/Economic Officer Alexander Titolo for reasons
1.4 (b) and (d).

--------------
SUMMARY
--------------


1. (C) China's diplomatic and economic profile in Lithuania
is growing. There are more visits by official Chinese, an
expanding diplomatic presence, and a burgeoning commercial
relationship. GOL officials have told us that they see clear
signs of greater Chinese interest in Lithuania. Increased
interaction, however, has not yet translated into a mature
bilateral relationship or substantive bilateral agenda. We
do not expect changes in core GOL policies to result from the
increase in China's attention - at least, not in the near or
mid-term. Beijing's increasing interest in Lithuania will
continue to bear close watching. END SUMMARY.

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CHINA'S DIPLOMATIC APPROACH TO LITHUANIA
--------------

Expanding Presence


2. (C) China has a large and growing diplomatic
representation in Lithuania. The Chinese mission in
Lithuania has increased from four to fourteen officials since
2000, and is now the third largest embassy in town after
Russia and the United States. Chinese diplomats have told
Embassy personnel that China is looking to build a new
chancery in Vilnius. The diplomatic list suggests a heavy
emphasis on economics and trade. At least one Chinese
diplomat has lived in Lithuania for several years, including
as a student, and speaks Lithuanian well (a rarity among
non-USG diplomats accredited to Lithuania).


3. (C) MFA Undersecretary Dalius Cekuolis told the
Ambassador that, since Lithuania's EU and NATO accession,
Lithuania has occupied a "higher drawer of interest" for
China. Dainius Kamaitis, Head of the MFA's Asia and Pacific
Division, told us that Chinese diplomats have regular but
infrequent contact with the MFA. A few predictable
exceptions aside, Kamaitis said, the Chinese diplomats are at
a loss for topics of discussion with their Lithuanian
counterparts and do not even engage vigorously on the topics
that should arguably matter most. Any hint of GOL or EU
dealings with Taipei provokes urgent requests for meetings,
but, he noted, the Chinese demarched GOL officials only twice
in the months leading to the EU's discussions on lifting the

arms embargo. Undersecretary Cekuolis, recounting his May
trip to China, likewise told the Ambassador that, in a
45-minute meeting, Foreign Minister Li Zhaoxing only briefly
mentioned the EU arms embargo. During Li's August visit to
Lithuanian, brief discussion of the arms embargo with FM
Antanas Valionis ended quickly when Valionis raised GOL
concerns over an arms race in Asia.


4. (C) Kamaitis told us he is mystified by the Chinese
embassy's lack of focus on the arms embargo issue, and by its
insistence on dealing almost exclusively with the Foreign
Ministry, rather than seeking to broaden its engagement
throughout the GOL. (For its part, Lithuania's position on
the embargo has been consistent: Lithuania opposes lifting
the embargo, but has little vested interest in the issue, and
will likely not challenge EU consensus.)

UN and USG focus


5. (C) Cekuolis said that Li focused particularly on UN
reform during both the May meeting in Beijing and his August
17-18 visit of to Vilnius. In his meeting with FM Valionis,
Li stressed commonality of Chinese and U.S. concerns
regarding UN reform. On the theme of U.S.-China relations
overall, Li said that the countries maintain strong cultural
ties and that Beijing and the USG have cooperated on North
Korea. Minister Li told his Lithuanian counterpart that
China's main area of contention with the USG is the sale of
advanced weapons to Taiwan.

And human rights?


6. (C) Lithuania has similar trouble finding themes for
discussion with China and MFA officials have (apparently with
unintentional irony) chosen to address human rights.
Valionis told Li that the GOL wants China to support its call
for the Government of Belarus to respect its citizens' human
and political rights. The GOL also seeks Chinese support for
its efforts to gain a seat on the UN Human Rights Commission.
The Ministers also discussed the possibility of the GOL
offering support for China's candidacy on the International
Maritime Organization in exchange for prior Chinese support
for Lithuania's membership in ECOSOC.


7. (C) Despite the growing size of the embassy and the
increase in high-level contacts, Kamaitis described China's
diplomatic efforts in Lithuania as immature. As an example,
Kamaitis said that, after confirming FM Li's intention to
visit Lithuania in August (only two weeks before his
arrival),the Chinese asked the GOL what they wanted to talk
about. "They (the Chinese) are the ones that wanted to come
here, and they didn't know what they want to talk about," he
remarked. Director of the Department for the Americas,
Africa, Asia and Oceania Jonas Paslauskas similarly commented
on FM Li's trip that "we are trying to figure out why they
(were) here."
--------------
FETING PARLIAMENT
--------------


8. (C) MP Vaclov Stankevic, a member of the China Caucus,
said that he expects the Chinese to increase efforts to sway
GOL policy, especially on the arms embargo, but that their
outreach to date has been largely limited to representational
events. Resident Chinese Ambassador Yang Xiuping has hosted
two receptions for the Caucus at the Chinese Embassy.
Stankevic describes Chinese culture's exoticism as the
events' primary attraction to Lithuanians.

--------------
MILITARY RELATIONS
--------------


9. (C) Military ties between Lithuania and China are
primarily cordial, formal, and pro forma. Lithuania's
Minister of Defense visited China in 2004. GOL officials
give sanitized presentations to Chinese Military attaches on
topics on which they are much more expansive with their NATO
allies. Alvydas Kunigelis, Director of the MOD's
International Relations Department, told us that the Chinese
government invited Lithuania to send a representative to a
one-month seminar in China in late 2005 that will focus on
security policy. (The Government of China will cover the
cost of lodging for the Lithuanian representative.)
Kunigelis affirmed that while the GOL is happy to take
advantage of such opportunities, there is little likelihood
that the GOL and China will find areas of substantive
military cooperation or trade in armaments.

--------------
CHINA'S ECONOMIC INFLUENCE
--------------

Cheap goods in; jobs out


10. (U) Lithuania's commercial relationship with China
entails some of the same costs and benefits that feature in
our own bilateral trade relationship with China. Consumers
benefit from the inflow of cheap, well-made goods, but the
imports and competition in third markets threaten jobs in
some sectors, especially in light manufacturing. Lithuania
imported $294 million in Chinese goods in 2004. The
Lithuanian supermarket chain VP Market, with over three
hundred outlets in the Baltic states, has relied heavily on
imports of low-cost consumer products from China to fuel its
growth. Lithuanian consumers benefit from a rapidly
expanding selection of affordable made-in-China goods in
those and other local stores. The lower prices also help to
keep local inflation in check despite growing consumer demand.


11. (U) The surge of Chinese exports to other parts of
Europe, however, plays a part in the dramatic decline in
sales of Lithuanian products to EU countries in the last
year. This is most notable in Lithuania's textile industry,
in which up to 30,000 jobs may be lost in the near future due
to competition from China, according to the Association of
Lithuanian Textile Enterprises.

Eyes to Port


12. (SBU) The Port of Klaipeda is one of Lithuania's key
attractions for China. GOL officials believe that Chinese
businesses have their sights on the port of Klaipeda as a
possible site for a regional trade base. Officials from the
Klaipeda Port Authority and the Chinese port of Qindao signed
an agreement to facilitate trade in May. A Chinese trade
delegation to Lithuania met with the GOL's Vice-Minister of
Transport in June to discuss Chinese use of Klaipeda. The
MFA's Ginutis Voveris, Ambassador at Large for the Americas,
Africa, Asia and Oceania, told us that the GOL is also
considering the promotion of Klaipeda as a rail terminus from
which goods could then be sent by sea to Northern European
markets. GOL officials view China as a large potential
customer if this capacity is developed.


13. (C) Port agreements and trade missions have not yet led
to major Chinese investments in Lithuania, nor have they
significantly increased the importance of the Chinese market
to Lithuanian exporters. Valdas Monkus, Vice Chairmen of the
American Chamber of Commerce in Lithuania and a manager for
IBM's Baltic operations, told us that Chinese businesses are
still mainly in a learning mode, rather than actively
investing. Lithuanian exports to China have grown from
$875,000 in 1999 (.029% of total exports) to $11.65 million
in 2004, though this still represents a tiny fraction of
total exports (.125%).

--------------
COMMENT
--------------


14. (C) The uptick in diplomatic engagement between China
and Lithuania is more a matter of form than substance -- for
now. The high-level meetings and China's relatively large
diplomatic presence have not yet translated into concerted
Chinese efforts to sway the GOL on key issues. Rather, with
the increasingly active Chinese Embassy in Vilnius and
deepening economic ties, it appears that the Chinese are
laying the foundation for a more substantive and profitable
future. GOL officials acknowledge that China's growing
economic importance here will affect Lithuania, but, for many
here, China is too distant and exotic to cause concern.
China is an unlikely ally for the GOL, sharing little of
Lithuania's interest in promoting regional democracy and
maintaining strong transatlantic ties. We do not see
evidence, at this time, that any of the core commitments that
underlay the robust U.S.-Lithuania bilateral relationship are
jeopardized by China's growing presence here.
MULL