China wants to purchase a controlling interest in Lithuania’s port of Klaipeda, stoking suspicions that Beijing seeks political leverage that could be used to hamper NATO military operations in a crisis.
“We can't afford that China controls Klaipeda port,” Lithuanian Defense Minister Raimundas Karoblis told the Washington Examiner.
This attempted investment in the deep-water port would extend China’s Belt and Road Initiative to the Baltic Sea, while U.S. officials already worry that the communist power could pose a military threat in the North Atlantic. The negotiations are emblematic of Chinese President Xi Jinping’s strategic use of economic might, sources say, as Chinese authorities are refusing to invest in the port unless they receive a majority ownership stake.
“China says, ‘no, no, no — we want to invest, but we need to control it, to have 50% and more,” a Baltic official familiar with the multiyear dialogue said on condition of anonymity.
Lithuanian authorities are holding the line against the deal. “We will not allow them the controlling [stake],” Karoblis said.
The financial incentives are both a carrot and a stick. Chinese officials have tried to sweeten the deal by proposing to increase the flow of cargo from an industrial park that the communist power has established in Belarus. That offer is accompanied by the veiled threat that Lithuania might lose investment if they do not cooperate.
“They might export via Klaipeda port, or they might choose a different port, and in this sense, it’s also pressure,” said the source who is familiar with the dialogue.
Chinese officials have been flexing diplomatic and military muscle in northern Europe over the last two years. Secretary of State Mike Pompeo warned in May that the Arctic “has become an arena for power and for competition” with China after Beijing declared itself a “near-Arctic” power. In 2017, China and Russia — the main geopolitical rivals of the United States — selected the Baltic Sea as the scene of their first joint naval exercises.
The status of Klaipeda has been on the NATO agenda in summits throughout 2019, according to the Lithuanian defense minister. That dialogue has been overshadowed by U.S. warnings that China plans to use cutting-edge telecommunications technology to gain access to NATO communications systems.
“For some months now, allies have been assessing the impact of foreign ownership, control or direct investments on a range of strategic infrastructure and sensitive technologies,” a NATO official told the Washington Examiner, noting recent alliance agreements to protect the telecommunications sector. “Foreign ownership of ports, railroads, and airfields could also be a factor for NATO’s ability to quickly move forces across Europe.”
Karoblis acknowledged that a Chinese purchase of the port could allow Beijing to “create obstacles for the arrival of military cargoes, military equipment, [or] reinforcements” in a crisis. Lithuanian authorities, while blocking the sale, also are warning other NATO allies about the risks of such agreements. “Our position is very clear that it's a strategic infrastructure project,” he said. “We can't afford to be dependent on China.”