Lithuania, Taiwan and Chip Geopolitics
This summer, I was walking through one of the narrow streets in the old town of Vilnius when, out of the corner of my eye, I caught a glimpse of the Taiwanese flag, prompting me to take a closer look. It was positioned above the entry to one of the multiple bars on the street, right next to the flags of Lithuania and Ukraine. Ukrainian flags all over the city are nothing unusual – support for another post-USSR country defending its freedom and democracy has been unconditional since the very first day of the war. Perhaps unexpectedly to some, the rationale behind the display of the Taiwan flag is not too distinct from that of the Ukrainian one.
In November 2021, Lithuania raised a few eyebrows with the opening of ‘Taiwanese Representative Office’ in Vilnius (the usual practice is to use the name ‘Taipei’ to avoid references to a territory that China claims as its own). This, needless to say, angered China, who quickly responded with an import ban on Lithuanian goods and services. The response was so rapid that 20,000 bottles of Lithuanian dark rum shipped to China were banned from crossing the border despite having already made the journey across the South China sea. They were saved only when Taiwan offered to buy them instead. To create demand for the excess of dark rum in the market as a result of this act of solidarity, Taiwan’s National Development Council circulated illustrations on its social media to promote recipes containing dark rum.
The Lithuanian challenge came as a surprise for both international media and the EU. Usually, the EU employs a far more cautious approach in dealing with the global superpowers, especially when the superpower in question is also its biggest trade partner. However, the opening of the Representative Office and the rum incident were only the beginning. A little more than a year later, the Lithuanian IoT company Teltonika signed a 14 million euro semiconductor technology transfer investment deal with Taiwan’s Industrial Technology Research Institute (ITRI). This effectively established the small Baltic country as the newest player in the chip production global value chain, yet again provoking China. China is already competing in the semiconductor chip war, with the US aiming to limit Chinese progress towards high-tech chip manufacturing.
For many, the timing of events seemed suspicious. Was it Lithuania’s plan to secure semiconductor investments from Taiwan all along? Was it only ingratiating itself with Taiwan by opening the de facto embassy? Wanting to know more about the interplay between geopolitics and the world of semiconductors business in Lithuania, I asked Dr Chris Miller, the author of Chip War about it. ‘Most of the dynamics in the industry are still decided by commercial factors’, he answered. ‘How significant Lithuania’s integration to the chip global value chain will be is 95% determined by what Lithuanian business can provide and 5% by politics’. Dr Miller assured me that Eastern Europe is still a very tiny player in the market and has yet to build its industries. Neither the diplomatic moves against China, nor the securitisation of semiconductor IPs are likely to significantly promote Lithuanian strategic or economic weight in international geopolitics or the global chip industry.
The Westernisation of Lithuania
The almost absurd altercation with China, coupled with an unconditional wish to break through to the high-tech, capital-intensive semiconductor industry dominated by the strongest economies in the world, reveals Lithuania’s hyper-Westernised understanding of its place in the global world order and its own future.
Those who have not had direct contact with Eastern Europe may have perceptions of the region as Russian-leaning, conservative, and USSR-nostalgic. Perhaps some still imagine us riding Moskvitchs, wearing sheepskin coats and ushankas, and having vodka and cigarettes for breakfast. And while I have thrifted an amazing sheepskin coat last year (to wear during winter in Cambridge), many post-communist countries are now more Western than the West itself, with Lithuania being the very best example of this.
The values, consciousness, and general discourses currently found in Lithuania are almost absolutely contrary to what the USSR promoted. This does not necessarily include social values; the Lithuanian parliament only recently voted for a first stage of the legalisation of same-sex civil partnerships bill, and legalising same-sex marriage is not even up for debate yet. However, when it comes to the economy and international relations, Lithuania equates ‘Western’ principles with the ultimate ‘good’, and everything non-Western (i.e., Russia, and China) with the ultimate ‘evil’. The West is synonymous with what is desirable; this is best reflected in the political party programmes. The current political power in Lithuania is held by a coalition of pro-European liberal and conservative parties. The coalition manifesto contains phrases such as ‘we will continue to create a Western … Lithuania’ and ‘The Liberals … think of Lithuania as of free people, whose acts are based on Western democratic tradition’. The parliament programme also names ‘belonging to the Western value-based society’ as the first reason to pursue EU-aligned policies. To unpack what these ‘Western values’ entail, let us review both Lithuania’s international relations and economic development plans, starting with the former.
Being Western for Lithuania means having sovereignty and democracy, something that Lithuania values above all else after its occupation by either the Russian Empire or Soviet Russia from 1795 to 1990, with only a short period of independence during the interwar period. Painful historical episodes, including when 130,000 Lithuanians were sent to Siberian labour camps, has left a legacy of trauma and the country to regard all authoritarian regimes as possible threats. This cruel history is remembered daily in Lithuania, ranging from national celebrations, TV documentaries, and the national school curriculum for history or literature classes.
Jessie Barton Hronešová, a lecturer at UCL, analyses how such constant narratives of ‘victimhood’ and ‘total criminal totalitarianism’ in Eastern Europe create simplistic national moral compasses which lead one to consider any totalitarian regime as the same evil, for instance by equating communism to Nazism. This partially explains why Lithuania is so empathetic towards Taiwan; the former has equated its own experience as an occupied country by imperial and later Soviet Russia to the Taiwanese struggle to break off from China. This also helps to account for why Lithuania has condemned all countries not in support of Ukraine in its war against Russia. This includes China, which Lithuania has criticised in its new Indo-Pacific strategy as a host of the NATO 2023 Summit.
From International Relations to Economic Values
Not only does the unconditional hostility towards countries such as China and Russia reveal Lithuania’s hyper-Westernised values, but it also illustrates its glorification of high-tech and science industries, disavowing Lithuania’s traditionally agricultural-based origins. This, of course, should not be surprising: moving to higher-added-value sectors is a key step towards achieving growth and escaping poverty; the consequences of this strategy over the years have been beneficial to the Lithuanian economy as a whole. Yet, prioritising a high-tech economy without consideration for anything else has had devastating effects on the agricultural sector and its communities. Lithuanian small-scale farmers today are struggling to make ends meet, resulting in 50% of all agricultural land being controlled by 3.5% of farms. Young people from rural areas are epidemically emigrating either to the capital or abroad, leaving empty ghost villages behind.
Lithuania’s economic priorities are the consequence of the country’s attempt to escape its communist history. In this respect, the Shock Doctrine period of the 1990s, which resulted from efforts of neoliberal Western economies to draw post-USSR countries into its influence, is significant. According to Stasys Kropas, a Lithuanian economist and one of the figures behind Lithuania’s Independence Act, turning to the IMF for its loans was Lithuania’s only option after breaking out of the USSR, given that the country was in dire need of funds to grow economically and be less susceptible to intimidation from Russia. But to receive loans, Lithuania had to implement internal policy changes, such as austerity, liberalisation of markets, privatisation, and openness to foreign trade. Thus, as Andrew C. Janos of the University of Berkeley argues, Brussels and Washington effectively reshaped East European nations ‘in the images of the West’.
The Lithuanian outlook in international relations is therefore built on Western values. Its hostility towards China and support for Taiwan—countries which are thousands of miles away—is an example of such an outlook. Being a small country, with little experience of self-determination and sovereignty, Lithuania’s values reflects a mix of historical trauma, glorification of Western democracy, and the global hegemony of neoliberalism.