SEOUL, Jun. 13 (Korea Bizwire) — Despite the newly-elected South Korean government’s efforts to work with China, the deployment of a THAAD missile defense system at home continues to haunt South Korean companies operating in their neighbor across the Yellow Sea, particularly Lotte.
According to Lotte officials and other diplomatic sources, Chinese authorities have once again forced some of the Chinese branches of Lotte Mart to close, bringing the total number of suspended Lotte Mart stores to 74.
Including the latest occasion, it’s the fourth time that Chinese governing bodies have targeted Lotte Mart by issuing a suspension of business without a clear reason.
Previously, many Lotte Mart stores were targeted for fire inspections without any warning, while the Chinese headquarters of Lotte Group in Shanghai was raided by authorities as part of a tax investigation last year.
Lotte has since requested a safety reassessment from the Chinese government, but Chinese fire authorities have yet to respond to Lotte’s request.
Reports of the latest suspension of business imposed on some of the Chinese branches of Lotte Mart come as something of a surprise in the wake of talks and visits between government officials from both countries in recent weeks, putting to bed hopeful rumors that the Moon administration’s recent efforts might have broken the ice.
Earlier this month, a Lotte official denied rumors over an overall business withdrawal from China, saying, “Through numerous investments in China, Lotte has contributed to the country’s development and helped create new jobs. We will keep up with the accomplishments into the future.”
One source based in Beijing says otherwise, however.
“Though we are continuing to monitor the economic damage to Lotte caused by the deployment of the THAAD system, we have noticed little to no change.
“If the situation doesn’t improve, we predict it will be difficult (for Lotte) to continue its business.”
Since last November when Lotte reached an agreement with the Ministry of Defense to provide land at its golf club in Seongju County to deploy a THAAD anti-missile system, the South Korean company has been at the center of China’s economic retaliation, with 13 branches voluntarily closed amid growing anti-Korean sentiment.
Last month, Lotte estimated that its total losses from the THAAD row reached 250 billion won ($222.5 million) in March alone, forecasting aggregate losses (from March) to surpass 1 trillion won by the end of June.
Ashley Song (firstname.lastname@example.org)