The European Union flags in front of EU headquarters in Brussels, Belgium. Photo: Xinhua

Chinese officials on Thursday urged the EU to distinguish "right from wrong" in Lithuania's mistake over the Taiwan question and be cautious over the Baltic country's attempt to kidnap China-EU relations, vowing to handle the EU's WTO lawsuit against China in accordance with the WTO's rules.

The EU on Thursday launched a case at the WTO against China over its "discriminatory trade practices" against Lithuania, which are also hitting other exports from the EU's single market, the bloc said in a statement, adding that such actions appear to be "illegal under WTO rules."

Commenting on the reported EU move, Zhao Lijian, a spokesperson for the Chinese Foreign Ministry, vehemently denied the allegation, saying that the so-called coercion against Lithuania is completely false, and the issue between China and Lithuania is political rather than economic, and it was created because of the latter's treachery that hurts China's interests.

At a regular press briefing, Zhao also said that the issue is a bilateral one between China and Lithuania, and not between China and the EU. "We also remind the EU to distinguish right from wrong and be alert to Lithuania's attempt to kidnap China-EU relations," Zhao said.

Also commenting on the EU's threat on Thursday, Gao Feng, a spokesperson for China's Ministry of Commerce (MOFCOM), said that China will handle the issue in accordance with relevant WTO rules.

"As members of the WTO, China and the EU have always maintained communication within the WTO dispute settlement mechanism," the MOFCOM spokesperson said, stressing that China has always handled foreign trade in line with WTO rules.  

Analysts pointed out that the EU's reported move is not in line with WTO rules because there is no factual basis proving China's alleged "coercion."

The EU's approach has actually shifted the issue from a political problem to an economic problem by filing a case at the WTO, since the bloc cannot find any factual evidence proving Lithuania's accusation, Cui Hongjian, director of the Department of European Studies at the China Institute of International Studies, told the Global Times on Thursday.

Cui noted that Lithuania will be unable to get any benefits from the WTO case since China has not behaved in the way that Lithuania claimed.

The comments come as Lithuanian officials reportedly mull moves to de-escalate tensions with China, including changing the name of the "Taiwanese representative office" in Vilnius, as it starts to face the economic consequences of its mistake.

Chinese and foreign companies are abandoning Lithuania by relocating their production or sourcing products from elsewhere to avert risks, as the Baltic country's mistake on the Taiwan question continues to pose risks for global businesses, firms told the Global Times on Wednesday.

For example, a Shanghai-based manager, who works in the global laser business, told the Global Times on Wednesday on condition of anonymity that the company is reducing trade with the Lithuanian side due to growing concerns posed by the strained bilateral relations.

Germany-based Klasmann-Deilmann Group, a globally active manufacturer of substrates for professional horticulture, was moving production for the Chinese market to other European factories, its CEO told the Global Times.