|China's communists are getting back at South Korea economically over the deployment of a THAAD system.|
Let's go back to the beginning: South Korea's government has been seeking land to base the Terminal High Altitude Area Defense (THAAD) system near the border with North Korea. In this instance, the Korean conglomerate Lotte had such available land. Lotte's diverse holdings include a confectioner, groceries, and even theme parks. As it so happened, Lotte was also planning to build a theme park in mainland China. Let's just say that plan has been trashed by PRC authorities upset about the proliferation of ABM systems in Asia which will be based on Lotte-owned land:
Lotte Group has been forced to suspend the construction of its theme park in northeastern China, the latest in a series of retaliatory steps against Korea's decision to deploy a U.S. anti-missile defense system. Korea's fifth-largest conglomerate has been the main target of the reprisal for its decision to provide a golf course as the site for a U.S. Terminal High Altitude Area Defense (THAAD) battery.Yeah, whatever; fire hazard my foot. Lotte recently finalizing a land swap deal only kicked the PRC into overdrive as the PRC is now hitting South Korea on nearly all fronts where there's economic interaction. Today, the PRC's actions arguably sent the Korean stock index KOSPI down over a percent:
The Chinese government ordered Lotte last December to stop building the Lotte World Theme Park near its department store and cinema in Shenyang, Liaoning Province, according to Lotte officials Wednesday. They said the authorities took issue with the construction site's preparedness for fire emergencies.
China has the economic power to move markets, and it isn’t afraid to use it. South Korean stock trading offered a case in point Friday, with a selloff in hotels, cosmetic makers and other tourism-related companies that made the country’s benchmark the worst performer among Asian equity markets. The slide followed a Yonhap news agency report on China ordering travel agents to halt sales of holiday packages to South Korea.Travel to Korea seems an obvious target, but how about makeup?
Amorepacific Corp., South Korea’s biggest cosmetics company. Chinese authorities have ordered the destruction of about 700 kilograms of Amorepacific’s imported product, saying they included bacteria. The company slid 13 percent Friday...I agree though is that the "soft power" of Korea is too strong a lure for these PRC covert sanctions to have much traction:
Kim Yeong Ju, an official at South Korea’s Korea Tourism Organization, said its Chinese counterpart issued the ban, which also covers flights to South Korea and hotel bookings. Almost 50 percent of the foreign visitors to Korea in 2016 were from China, according to the KTO.
The move may be more about conveying China’s displeasure than inflicting lasting wounds to the relationship, said JJ Kang, head of equity at Franklin Templeton Investment Trust Management Co. in Seoul.Make no mistake: the Koreans offer really good stuff in terms of makeup, tourism, etc. that Chinese tourists crave and certainly cannot obtain locally.
“China never does things that are against their economic interests,” Kang said. “Shoppers will do anything they can if they want Korean products. Tourism will be difficult but it is hard for China to drag this problem on long term.”
UPDATE: Also follow the online war between citizens going on due to this deployment.