Trade and Investment

Lithuania and Taiwan became trade partners in the early 1990s after Lithuania regained independence and began building an international trade network. However, the initial progress was slow. Despite numerous visits by business delegations from both Taiwan and Lithuania to explore trade and investment opportunities, bilateral trade represented only a small share of both countries’ exports and imports, and investment remained limited. As the Lithuanian business newspaper Verslo Žinios reported in 1997, “both sides know very little about each other, and much needs to be done to deepen economic ties.”

Further work and more active information sharing eventually led to some breakthroughs, as reflected in the graph above. For example, in 2002, the introduction of visa-free movement facilitated travel between Taiwan and Lithuania, benefiting business representatives. Additionally, both countries joined the World Trade Organization around the same time: Lithuania in May 2001 and Taiwan in January 2002, which resolved some trade technicalities. This led to an increase in bilateral trade, from around $20 million USD in 2001 to $160 million USD in 2011, primarily due to a dramatic rise in the value of Taiwanese products imported to Lithuania. This level has remained relatively stable until now, but many experts believe the full potential of economic ties has yet to be reached as both Lithuanian and Taiwanese industries and services could offer much more to each other.

Early Developments

The first significant economic mission from Taiwan to Lithuania occurred in 1997. In March of that year, both sides agreed to establish the Association for Economic and Cultural Cooperation between Lithuania and Taiwan, initiating preparations for reciprocal visits. These efforts involved both governments, and in May, Vice Minister of Foreign Affairs Chen Chien-jen visited Lithuania to encourage closer cooperation. As a result, a large Taiwanese delegation arrived in Lithuania in June, comprising around 100 people, including politicians, representatives of major companies and tourism agencies, economists, and more. By that time, Taiwan had invested over $100 billion USD abroad, but in Lithuania, the investment was only around $100,000 USD. Taiwanese representatives acknowledged that awareness of Lithuania and other Baltic countries was low among Taiwanese businesses, contributing to reluctance among investors and traders to expand in this region.

In response to the Taiwanese visit, Lithuania’s Minister for European Affairs, Laima Andrikienė, organized a follow-up visit in August 1997. Accompanying her were Genovaitė Jakševičienė, Director General of the Lithuanian Investment Agency; Mindaugas Černiauskas, President of the Association of the Lithuanian Chambers of Industry, Commerce, and Crafts; and Raimondas Kvedaras, Vice-Chairman of the Board of Directors of Vilnius Bank. The delegation identified several challenges preventing closer Lithuania-Taiwan economic cooperation, including limited knowledge, the absence of representative offices, infrequent visits, and regulatory difficulties. Nonetheless, an Investment Promotion and Cooperation Agreement was signed between the Lithuanian Investment Agency and the Taiwan Industrial Development and Investment Centre.

Following these exchanges, there was a lengthy gap, with the next visit from Lithuania occurring only in 2014. That year, a delegation led by Rimantas Šidlauskas, Director General of the Association of the Lithuanian Chambers of Industry, Commerce, and Crafts, spent three days in Taipei, introducing Lithuania to various stakeholders and meeting with Vice-Minister of Economic Affairs Cho Shih-Chao (卓士昭), the head of the Taipei Export-Import Bank, and other prominent figures. Taiwan reciprocated with a delegation visit in September of the same year, including representatives from the China International Economic Cooperation Association, Taiwan’s Ministry of Economic Affairs, the banking sector, industry specialists, and business associations. Unfortunately, organized missions were paused again, although individual companies continued to explore business opportunities through individual trips, participation in trade expos, etc. No major exchanges occurred until significant cooperation emerged in the early 2020s.

Recent Breakthroughs

Interest in increased business opportunities grew around the time of the establishment of the Taiwanese Representative Office in Lithuania. Even before that, in the summer of 2021, Lithuanian electronics company Teltonika began exploring large-scale collaboration with Taiwanese companies to share know-how, aiming to develop semiconductor production in Lithuania by around 2030. This led to an agreement with Taiwan’s Industrial Technology Research Institute in early 2023. These collaborations were further strengthened in autumn 2021, with a visit by a delegation led by Minister of Economy Kung Ming-hsin, who signed six memorandums of understanding with Lithuanian counterpart Aušrinė Armonaitė, promoting business and research cooperation in advanced technologies. Lithuanian food companies also received a warm welcome at the Food Taipei expo, facilitating market entry. For instance, Lithuanian chocolate producer Rūta opened three dedicated stores in Taipei by 2024.

Soon after opening the Taiwanese Representative Office in Vilnius, Taiwan announced a special fund managed by Taiwania Capital to allocate $200 million USD for investments and $1 billion USD to support joint projects involving companies based in Taiwan and Central and Eastern European countries, with a priority for Lithuania, the Czech Republic, and Slovakia. In March 2022, a large business delegation visited Lithuanian companies specializing in electronics and lasers. Several months later, in September, representatives from seven Lithuanian biotech companies spent days in Taipei exploring potential partnerships and visiting the National Biotechnology Research Park. Later that year, the first Lithuanian beneficiary of the investment fund, Litilit, received €3.7 million, followed by €3.5 million for AI developer Oxipit. An agreement was also reached to allow Lithuanian agricultural products to be exported to Taiwan.

The past few years have been especially active. At the start of 2023, Taiwan’s Industrial Technology Research Institute (ITRI) signed an agreement with the Lithuanian Laser Association to establish a joint laser technology research and innovation center in Taiwan, and one additional agreement with electronics company Teltonika. According to a press release from Teltonika, “Under the agreement, Teltonika will obtain licences for semiconductor chip manufacturing technologies and devices developed by ITRI as well as get assistance in preparing detailed plans and engineering training for employees. These are fundamental parts of preparing for the implementation of semiconductor chip projects in Lithuania.”

In October of the same year, a large Lithuanian business delegation visited Taipei, attending the Fintech Taipei Forum, the Lithuanian Delegation Visit & Ecosystem Networking event, and several B2B meetings. The Lithuania-Taiwan Business Forum in June 2024 focused on the financial technology sector, coinciding with the news that Lithuanian financial transaction company TransferGO received a $10 million USD investment from the Taiwania Capital fund. Cooperation is also being explored in security technologies, as shown by an October meeting between Taiwan’s Aerospace Industries Development Corporation and the Lithuanian National Defence Industries Association in Vilnius.

Currently, Lithuania and Taiwan have a diverse trade relationship. Lithuania primarily imports electronic components, machinery, and medical devices from Taiwan, while Taiwan imports chemical products, optical equipment (such as lasers), and agricultural and forestry products from Lithuania.

Source: The Observatory of Economic Complexity

Key Institutions

Economic ties between Lithuania and Taiwan are facilitated via numerous institutions. Some of them existed in the past and do not function anymore, while others are at the epicenter of activities nowadays.

The recent proliferation of institutions promoting closer ties between Taiwan and Lithuania offers hope that, despite geographical distance and a complex geopolitical landscape, trade and investment between the two countries will continue to expand.

Sources:

• Verslo Žinios
• Statistical departments of Taiwan and Lithuania
• Island of Resilience: Taiwan Economic Miracle 2.0
• Czeslaw Tubilewicz, The Baltic States in Taiwan’s Post-Cold War ‘Flexible Diplomacy’. Europe-Asia Studies, Vol. 54, No. 5 (Jul., 2002), pp. 791-810