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International relations

Taiwan sets up $200m Lithuania investment fund amid China dispute

Beijing piling pressure on Vilnius after it allowed Taipei to open office

Taiwan Foreign Minister Joseph Wu spoke in July 2021 about opening a representative office in Vilnius.   © AP

VILNIUS (Reuters) -- Taiwan will create a $200 million fund to invest in Lithuanian industries and boost bilateral trade, it said on Wednesday, as the fiercely democratic island seeks to fend off diplomatic pressure on the Baltic state from China.

Lithuania is under pressure from the China to reverse its decision last year to allow self-ruled Taiwan to open a representative office - a de facto embassy - in Vilnius under its own name.

Beijing claims Taiwan as its "sacred" territory, ineligible for diplomatic ties of its own with other countries, and has in the past two years stepped up pressure to assert its sovereignty claims, fuelling anger in Taipei and deep concern in Washington.

China has never renounced the use of force to ensure eventual unification.

The strategic investment fund will be funded by Taiwan's national development fund and will be backed by the Taiwan central bank, the head of Taiwan's representative office in Lithuania, Eric Huang, told an online news conference.

"We will establish the fund as soon as possible and we hope this year we will have some tangible results ... I can imagine the first top priorities will be semiconductor, laser (and) biotechnology," Huang said.

Taiwan will be also accelerate its approval process for Lithuanian diary and grain exports into Taiwan, and will seek to link Lithuanian businesses into Taiwanese supply chains, he added.

China in August recalled its ambassador and in November downgraded diplomatic ties with Lithuania, and has also told multinational companies to sever links with Lithuania or face being shut out of the Chinese market.

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