The Wall Street Journal reported in June 2020 that the United States was trying to rally European governments to avoid Nuctech, whose screening systems for cargo, luggage and passengers are becoming a fixture at ports, border crossings and airports across Europe.
The Lithuanian goverment last year promised to support "those fighting for freedom" in Taiwan and last week sent only a transport minister to a virtual summit between leaders of China and 17 European countries, signalling its apparent concern over Chinese policies.
"The government decided that the contract does not meet the interests of national security," the prime minister's spokeswoman said after the behind-closed-doors meeting of the government.
Lithuanian law allows the government to block its strategic companies, such as the airports authority, from signing contracts if it deems them harmful to national security.
The U.S. ambassador in Vilnius earlier welcomed reports that Lithuania was considering banning Nuctech, local BNS wire reported.
"I congratulate the Lithuanian government on taking the step, which seeks to secure Lithuania's national security and its critical infrastructure," Ambassador Robert Gilchrist was quoted as saying.
Nuctech's subsidiary in Netherlands said it did not understand the government's concern as the scanning equipment would be produced in Poland, BNS said.
(Reporting By Andrius Sytas; Editing by Angus MacSwan)