China announced it would take countermeasures against European banks in retaliation for EU sanctions against Russia that hit two Chinese financial institutions due to their collaboration with the country.
China’s actions targeted two Lithuanian banks, UAB Urbo Bankas and AB Mano Bankas.
In an online statement, China’s Ministry of Commerce said organisations and individuals in China are prohibited from engaging in transactions, cooperation or other related activities with these two banks from August 13 onward.
It wasn’t a coincidence that Lithuanian banks were targeted. China and Lithuania have had a strained relationship for years now, beginning with Lithuania’s decision to allow Taiwan to open a representative office in Vilnius in November 2021 and ignoring Chinese sensitivities regarding Taiwanese independence.
In response, Beijing downgraded its diplomatic ties with the Baltic nation.
The ministry said in a separate statement: “We hope that the EU will cherish the long-term good cooperative relations formed between China and the EU and its member states in the fields of economy, trade and finance.”
It also called on the EU to “correct wrongdoings” and stop harming China’s interests and undermining China-EU cooperation.
However, both Lithuanian banks said in a reply on the sanctions that these would not affect the bank’s operations, customers, or services because neither of the banks operated in China.
Both said they did not receive prior indications, warnings or communications from any Chinese source.
Urbo Bankas said that the volume of transfers made by individual and corporate clients to accounts held in Chinese financial institutions only represented a insignificant share of the total transactions, while Mano Bankas stressed that its main activities are carried out in the European Union, in accordance with all applicable EU legislation.
On August 9, the EU implemented sanctions against Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank, something Beijing called “baseless.”
Brussels said the banks were listed for providing cryptocurrency services that were frustrating the purpose of the sanctions.
Chinese President Xi Jinping and Vladimir Putin declared earlier that China and Russia’s bilateral partnership was greater than a traditional alliance and that their friendship would know “no limits.”
NATO leaders have declared China as a “decisive enabler” of Russia’s war against Ukraine.
In December 2024, the EU hit Chinese companies suspected of supporting Russia’s aggression against Ukraine with full fledged sanctions for the first time. It targeted Chinese technology companies.
Before that, the EU and China have been having a tit-for-tat trade war, hitting each other with economic sanctions in retaliation for perceived protectionism, dumping practices and illegal state support.
China announced it would impose retaliatory import restrictions on European medical devices and anti-dumping duties on European brandy. https://t.co/zRgmyQ2kYL
— Brussels Signal (@brusselssignal) July 8, 2025
China have also imposed severe economic measures on Lithuania, including a de facto trade embargo. Lithuanian exports to China dropped steeply after that and have been slowly recovering, but imports from China, however, have surged to around €2 billion, ten times more than the export.
Before that, since around 2017, Lithuania’s perception of China shifted from viewing it as an economic opportunity to a systemic threat, emphasising democracy and human rights.
