Photo/Illutration Minister Kung Ming-Hsin of the National Development Council of Taiwan addresses media during a press conference in Prague, Czech Republic, on Oct. 25, 2021. (AP Photo)

VILNIUS, Lithuania--Taiwan will set up a $1 billion credit program aimed at funding projects by Lithuanian and Taiwanese companies amid economic pressure from China over an office that the island opened in the European Union country, Lithuanian officials said Tuesday.

It follows Taiwan's announcement last week about creating a $200 million investment fund to help Lithuania amid a diplomatic row with Beijing. American and Lithuanian officials say China has blocked imports from the Baltic nation, a close U.S. ally.

Lithuania broke with diplomatic custom by agreeing that a Taiwanese representative office in its capital of Vilnius--a de facto embassy--would bear the name Taiwan instead of Chinese Taipei, which other countries use to avoid offending Beijing. China considers Taiwan part of its territory with no right to diplomatic recognition.

Lithuania expects the new credit program to boost projects in tech industries, including computer chips, laser manufacturing and biotechnology sectors, that are facing pressure from China.

“It is very good news. I think Lithuania can be assessed as a potential investment site for the semiconductor industry,” Lithuanian Minister for Economy and Innovation Ausrine Armonaite told reporters after an online meeting with Minister Kung Ming-Hsin of the National Development Council of Taiwan.

Beijing last week blasted Taiwan’s investment fund for Lithuania as “dollar diplomacy" and has accused the U.S. of inciting the Baltic nation in efforts to contain China.

Lithuania, a country of 2.8 million people, is a member of the European Union and NATO. Before the diplomatic spat that erupted last year, China was Lithuania’s 13th biggest trade partner, while Taiwan was 65th.

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