What started as a diplomatic spat between China and Lithuania over the status of Taiwan is now creating economic tension across the European Union, providing a test for the region’s leaders of their ability to stand up to the world’s second-largest economy. Lithuania, a northern European country with a population under 3 million, sparked a row with China last March when it announced plans to establish a Taiwanese Representative Office — a de facto embassy — in its capital, Vilnius. The office opened in November using the island’s name, rather than the term “Taipei,” which many other countries, including the U.S., have adopted for similar offices. In response, China — which claims Taiwan as part of its territory — recalled its ambassador from Vilnius in August and expelled his Lithuanian counterpart. Lithuania has, in turn, shut down its embassy in Beijing and recalled its diplomats. The showdown escalated further in December when China imposed informal sancti