Political tension rising between Lithuania and China could impact rail freight volumes between the two countries. The Baltic country finds itself in this position again this year. Previously, such developments were related to Belarus. However, Lithuanian officials claim that there is nothing to worry about this time.

Lithuania and China relations balance on a tightrope currently. The tension is created after Lithuania and Taiwan announced their intention to strengthen their bonds by opening representing offices in each country. However, China is not pleased with the development and withdrew its ambassador from Lithuania while it called the Baltic state to do the same.

Following this incident, Marius Skuodis, Lithuania’s transport minister, commented on Lithuanian media that the tension could also impact rail freight volumes between the two countries.

No need to worry, says Lithuania

In response to Skudis’ comment, Mantas Bartuska, CEO of Lithuanian Railways, mentioned that the volumes between Lithuania and China are so insignificant that the impact will be minor even if they decrease. “There are certain trains from China going to Lithuania that, we see, might face problems. There are certain obstacles, but these are insignificant amounts,” told Bartuska to the Lithuanian news agency BNS.

However, is that the case? Because Lithuania does not only rely on import trains to China. The country is also exporting significant amounts of wheat, beef and other agricultural products towards the east, bringing back considerable revenue. If the two countries’ bilateral relations fail to restore, then Lithuania could suffer some financial damages.

Not the first time this year

Since the beginning of this year, Lithuanian Railways have been in the same position twice. The first time was in February when Belarus threatened to withdraw its oil products from the Lithuanian rail and port infrastructure and transport them through Russia. Such a move would decrease the transported volumes of LTG Cargo ( Lithuanian Railways subsidiary) by 35 per cent. Back then, LTG Cargo claimed that it was agile and ready to deal with the situation by investing in other countries, like Ukraine.

The second time was two months ago after the US possessed sanctions on Belarus. For Lithuania, this means that there is no possibility to establish new transport contracts for Belarussian products. A financial forecast by the Lithuanian Railways estimated that such a development could impact its yearly revenues, reducing them by 24 million euros.

Also read:

• Belarus withdraws its cargo, but Lithuanian Railways have the answer
• Lithuanian Railways will lose millions from EU sanctions on Belarus