Lithuanian industry chief warns of 'silent economic death' from trade imbalance with China

Lithuania faces a "silent economic death" if it does not address its growing trade imbalance with China, warns Vidmantas Janulevičius, president of the Lithuanian Confederation of Industrialists and founder of "BOD Group."

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Sooner or later, we know that he who only consumes, but does not export, has a negative trade balance. If we do nothing, many countries and the entire European Union will be condemned to such a silent economic death.

Janulevičius highlighted that while Lithuania's trade with China has grown, its neighboring Baltic states, Latvia and Estonia, have seen higher percentage increases. More critically, Lithuania's trade balance with China remains negative. This dependence extends to critical raw materials essential for electronics, a concern that has even prompted worry in the United States.

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However, the trade balance is also negative. And in this regard, of course, we cannot do without Chinese raw materials, critical raw materials.

Germany, a major European economy, also struggles with a significant trade deficit with China, importing far more than it exports. Janulevičius noted that Germany's trade imbalance reached 314% last year, despite China being its largest trading partner. He emphasized that while some German industries wish to maintain ties, a growing number recognize the need to renegotiate terms rather than sever them.

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The trade imbalance between exports and imports that exists in Germany and throughout Europe is very large.

Across the European Union, the trade deficit with China was a staggering 368 billion euros last year, averaging over a billion euros per day. This gap has widened by nearly 50% in the first two quarters of this year. Janulevičius recalled that before the pandemic, Lithuania's trade balance was relatively stable, fluctuating around zero. However, post-pandemic, the deficit has widened significantly, reaching nearly 6 billion euros last year. He stressed that this dependence should be reduced, not eliminated, to safeguard European industry and its capacity. Failure to act, he warned, would transform the EU into a "consumer union."

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This means that the difference is more than one billion euros per day. And the first two quarters of this year in the European Union showed that this increase is almost 50 percent higher.