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Continental to keep investing in Lithuania despite China pressure

·2-min read
FILE PHOTO: Continental factory in Kaunas

VILNIUS (Reuters) - Continental will continue investing in a factory in Lithuania, an executive was quoted saying, despite a diplomatic dispute between Beijing and the Baltic state that has threatened to embroil the German car parts maker.

Two people familiar with the matter told Reuters in December that China was pressuring Continental to stop using components made in Lithuania, after a row erupted over the opening of a de facto Taiwan embassy in the capital Vilnius.

Taiwan is a self-ruled island that China views as part of its territory, and following the embassy dispute China has pressed multinationals to sever ties with Lithuania or face exclusion from its market - dragging firms into the diplomatic spat and placing Beijing on a collision course with the European Union.

But the director of Continental's Lithuanian factory told local newspaper Verslo Zinios its investment plans hadn't changed.

"Our plans in Lithuania are the same as we stated at the beginning - 1,500 jobs and over 185 million euros ($210 million)investments," Shayan Ali was quoted saying.

Asked about the Chinese trade pressure, he said the factory "was undoubtedly affected by the changing situation, we did all we can to adapt to changing circumstances". He gave no further details.

Continental said in 2017 it would invest 95 million euros in the factory, creating 1,000 jobs. This was followed last year by the announcement of an additional 90 million euros investment into the factory, creating 500 more jobs.

"So far we have not deviated from the planned investment timetable," a Continental spokesperson told Reuters.

The EU in January launched a trade case against China at the World Trade Organization, backed by the United States, Australia and Taiwan itself, over Beijing's alleged trade curbs on Lithuania.

China's foreign ministry in December denied that Beijing had pressured multinational companies not to use Lithuanian-produced parts, though it said its companies no longer trusted Lithuania.

($1 = 0.8808 euros)

(Reporting by Andrius Sytas in Vilnius; Editing by David Holmes)

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