China has threatened to trade with some countries after rows. They call “the company” for help

WASHINGTON (AP) – Business is good at “the company.”

The eight-person State Department team is leading Washington’s efforts to mitigate the economic setback suffered by countries targeted by China.

This emerged in the rush to help Lithuania during a row with China over Taiwan two years ago. Today, “the company” is helping a growing number of countries deal with what diplomats call Beijing’s economic coercion.

Countries are “knocking, they are calling,” Undersecretary of State José Fernandez told The Associated Press in a recent interview. “We run a consultancy that doesn’t have to advertise to clients as they come.”

Led by State Department senior adviser Melanie Hart, the group examines vulnerabilities and develops responses for countries that are isolated or fear losing trade with world power China. Since the group launched with Lithuania, more than a dozen countries have asked the Biden administration for help, Fernandez said.

The effort comes as Washington steps up its campaign to push back China’s global influence and as tensions grow between the rivals.

The Chinese embassy in Washington has disputed the notion that Beijing is putting economic pressure on other countries, calling it “totally unfounded.” The United States, he claims, is the one bullying China economically by abusing export controls, treating Chinese companies unfairly, and characterizing Beijing as a perpetrator of economic coercion.

Fernandez said this is a tactic that China “uses again and again.” They believe intimidation works. This is why we acted. It was time to stop this thing. »

For example, when a Norwegian committee awarded the Nobel Peace Prize to a Chinese dissident in 2010, Beijing stopped buying salmon from the Nordic country. Two years later, China refused banana imports from the Philippines due to a territorial dispute in the South China Sea. In 2020, Beijing responded to Australia’s call for an investigation into the origins of the COVID-19 pandemic by increasing tariffs on Australian barley and wine.

Then came Lithuania. In late 2021 and early 2022, Lithuanian companies saw their shipments of goods to and from China blocked, and major European companies warned them that Lithuanian-made auto parts would be banned from products destined for the Chinese market.

This happened after Lithuania allowed Taiwan’s de facto embassy in Vilnius to be named after Taiwan, instead of Taipei – Taiwan’s capital – as Beijing preferred. China considers the self-ruled island to be part of Chinese territory and has protested the use of Taiwan.

Instead of giving in, the northern European country asked for help. The United States and its allies intervened.

American diplomats were looking for new markets for Lithuanian products. The Export-Import Bank of Washington provided Vilnius with $600 million in export credit, and the Pentagon signed a purchase agreement with the country.

And “the company” held on. The State Department acts as the first line of response and can coordinate with other U.S. agencies to access “all the tools available to the U.S. government,” according to a department official who asked to remain anonymous to discuss details of the team.

Although it takes years to reorient global supply chains to reduce dependence on countries like China, the team is trying to offer a faster way to alleviate a crisis, said the responsible, comparing the team to ambulance services that “help you get through that scary emergency.” time.”

For example, the United States might try to work with partners to help a country quickly divert its agricultural products to new markets, build more cold storage so products can reach more distant markets, or improve the quality of products to access more markets, the official said.

The aid is confidential, the official said, declining to discuss what tools the team has or to name the countries that have requested help.

Shay Wester, director of Asian economic affairs at the Asia Society Policy Institute, said it was an “important and much-needed initiative.”

“China’s growing use of economic coercion to pressure countries into political conflicts poses a significant challenge that requires a concerted response,” said Wester, co-author of an April report on the question.

Responses from other countries show there is strong demand for this type of support, Wester said.

This month, Lithuania hosted a conference on resisting economic pressure, and Foreign Minister Gabrielius Landsbergis said the aim of the action “is to crush the victims by forcing overthrow and public renunciation to its policy.

Liu Pengyu, a spokesperson for the Chinese embassy, ​​said the problem with Lithuania was “political, not economic.” They are due to Lithuania’s bad faith actions that harm China’s interests, not China’s pressure on Lithuania.”

Fernandez, who attended the conference, praised Lithuania for standing up to China. “Lithuania gave us the opportunity to prove that there were alternatives to coercion,” he said.