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Posted on: Beijing Bulletin, Monday, March 6th, 2017
Days after China decided to retaliate against South Korea’s collaboration with the United States over a U.S. anti-missile system, with economic measures against Seoul, now South Korea has responded.
Seoul said that it would ensure that Korean companies don’t face unfair trade measures in China ahead of the growing rift ahead of the controversial deployment of the Terminal High-Altitude Area Defense, or THAAD.
Beijing has argued that the missile system is threatening its security, while South Korea has said the missile system, whose radars are capable of peering deep into China’s north and parts of Russia, is needed to defend against missiles threats from North Korea, and is not targeted at other nations.
Through the week, unconvinced Chinese protesters led demonstrations against Lotte Mart, a South Korean hypermarket chain that sells food, clothing, toys and electronics.
This after Lotte Group agreed to provide a golf course to the South Korean government to site the system.
Following media reports that China’s National Tourism Administration had verbally ordered local travel agencies in Beijing to stop selling tour packages and trips to the country starting March 15, South Koreans were sharply hit last week.
Cosmetics makers, retailers, carmakers and airlines would be among the most significant losers if the rift expands.
On Sunday, citing unnamed officials, the Korea Economic Daily said in a report that Chinese authorities suspended businesses of four Lotte Mart stores for a month, allegedly for violating fire safety norms.
South Korean political parties immediately condemned the Chinese backlash with the South Korean government saying that it is “deeply concerned about the measures taken in China.”
Trade Minister Joo Hyung-hwan added that the government “will closely monitor the situation and strengthen responses.”
He further said, “Responses will be taken via international law should China violate WTO or Korea-China free trade agreement rules.”
Financial markets too took a beating with cosmetics makers, retailers, carmakers and airlines being among the most significant losers as South Korea’s main benchmark index fell 1.3 percent in afternoon trade on Friday.
The country’s benchmark became the worst performer among Asian equity markets.
According to Jung Sang Jin, who helps manage the equivalent of $33 billion at Korea Investment Management Co. in Seoul, “There is actually no industry in Korea that is free from THAAD risks. Many companies have plants in China, and China could halt operation at those plants.”
Meanwhile, on Sunday, reports noted that Lotte executives held a meeting, seeking “active help” from the South Korean government in handling damages.
The company said in a statement, “Lotte will make all out efforts to minimise inconveniences for consumers by forging a constant response system with all workers in China.”
It added that it has 20,000 employees in China, a third of its overseas workers.
Further, Foreign Minister Yun Byung-se criticised China’s move, claiming, “It is not right for China to retaliate or impose regulations against Lotte.”
Delivering a message through a local television channel, Byung-se said that THAAD is for national security and Lotte Group made a difficult decision to cooperate with the government.