In July last year, the tiny European state of Lithuania announced the opening of a Taiwanese representative office in its capital, Vilnius. To the casual observer, the statement may have seemed unremarkable. To China, it was an intolerable declaration of diplomatic hostility.When the office opened last November, it was the first time a European Union member state had let Taiwan use its own name for a foreign outpost. That touched a nerve in China, which claims Taiwan as part of its territory, even though the island has long seen itself as a self-governed democratic state. To avoid offending China, most countries eschew official relations with Taiwan and recognise its representative office under the name of its capital, Taipei. The Baltic state remained defiant while China downgraded its diplomatic relations and restricted its trade with Lithuania. But then, this week, Lithuanian President Gitanas Nauseda expressed doubts about the wisdom of his country's principled stand, in comments welcomed by China. "I think it was not the opening of the Taiwanese office that was a mistake, it was its name, which was not co-ordinated with me," Mr Nauseda told local radio on Tuesday. China's foreign ministry said recognising a mistake was the right step, but stressed that excuses did not help solve the problem. That problem, said Lithuania's president, was the name "and now we have to deal with the consequences". Those consequences have started to take their toll as companies from Lithuania - and from other European countries that source parts there - complain about restrictions on trade with China. China has denied ordering a trade boycott on Lithuania but the EU says it has verified reports of imports blocked at customs. If diplomacy fails, the European Commission says it will file a complaint with the World Trade Organization (WTO). Unless Lithuania bends to China's will, an amicable resolution looks unlikely.