China has added two Lithuanian banks, Urbo bankas (UAB) and Mano bankas (AB), to its sanctions list. This decision prohibits Chinese legal entities and individuals from engaging in any cooperation with these financial institutions.
China’s Ministry of Commerce explained this move as a retaliatory measure against European Union sanctions on Chinese banks, specifically Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank. Beijing expressed hope that the EU would “correct its errors and cease harming China’s interests.“
Why Lithuanian Banks Were Targeted by Chinese Sanctions
Both Urbo bankas and Mano bankas stated that China’s sanctions came as a surprise. The credit institutions reported receiving “neither hints, nor warnings, nor signals” from Chinese authorities and do not know why they specifically became Beijing’s targets.
While the Chinese side did not directly comment on its choice of Lithuanian banks, the decision is clearly linked to the extremely strained relations between Vilnius and Beijing. This conflict began in 2021 when Lithuania permitted the opening of a Taiwanese Representative Office in Vilnius under its own name. This move contradicted Beijing’s “One China” policy. Beijing insisted that the name be changed to the “Taipei Representative Office,” as is the practice in other countries. Lithuania refused, and in response, Beijing downgraded diplomatic relations with Lithuania to the chargé d’affaires level and froze trade ties.
Relations became so hostile that in late 2021, the Chinese publication Global Times (Huanqiu Shibao) released a harshly worded article about Lithuania, comparing the country to a “flea.” The authors suggested that Lithuanians took this step to remind the West of their existence and to obtain real financial compensation from the US for what they claimed was self-inflicted, fictitious damage.
Against the backdrop of this conflict, former Lithuanian Foreign Minister Gabrielius Landsbergis declared at a Vilnius forum in 2022: “We are a state that can be called free from China.“
In April of this year, conservative politician Laurynas Kasčiūnas proposed using Lithuania’s “exceptional relations with Taiwan” as a trump card in dialogue with the United States. He spoke of attracting American troops to Lithuania and a possible US intention to redeploy its forces from Europe to Southeast Asia and the Far East. Kasčiūnas did not clarify how these points were connected.
In March 2025, a new ruling coalition, led by the Social Democrats, began discussing the restoration of diplomatic relations with China. However, at that time, Darius Jauniškis, then head of the State Security Department (VSD) and now Lithuania’s representative to NATO, expressed his opinion that China would never forgive Lithuania for its relations with Taiwan, and that apologizing to Beijing would be a humiliation for Vilnius. The Chinese sanctions against Lithuanian banks thus mark the latest escalation in this protracted diplomatic conflict.