SEOUL, Sept. 7 (Korea Bizwire) — With the government keeping a wary eye on China’s next move amid the deployment of an additional THAAD missile defense battery, South Korean companies are bracing for further retaliation from the Chinese government.
Earlier Thursday, the South Korean defense ministry announced the deployment of an additional four launchers for the Terminal High Altitude Area Defense battery amid growing threats from North Korea.
With China’s strong opposition in mind however, South Korean companies, particularly those in the distribution and tourism industries, are anticipating further hostility from the Chinese government, dealing another crippling blow to the country’s vulnerable economy.
Among the firms dreading the economic aftermath of the newly deployed U.S.-backed anti-missile systems is Lotte Group, the operator of Lotte Mart, which saw 87 of its 112 stores in China shuttered in recent months.
Having injected 360 billion won into its retail business as an emergency relief fund, the South Korean conglomerate recently decided to invest an additional 340 billion won in an all-out effort to save the dying Chinese unit of its supermarket business.
The grim prospects for South Korean business operators in China due to the ongoing political tensions between the two countries have thwarted the hope before the election earlier this year that with a new administration, things would change.
“It’s regretful that practically nothing can be done, as expectations that the tension surrounding the THAAD systems will be resolved evaporate. Because of political issues, companies are being stuck in a situation with no exit,” a distribution industry source said.
A similar sentiment is felt in the duty-free store industry, one of the most heavily hit by China’s pressure on travel companies to stop group tour packages to South Korea, as these stores rely heavily on Chinese tourists.
“I’m losing hope as North Korean issues will worsen the tension over the THAAD system. I used to think this could go on until next year in the worst-case scenario, but now I think it will last even longer,” an official from a duty-free store said.
Hit by the absence of Chinese tour groups, the overall number of foreign tourists to South Korea plunged by over 40 percent on-year last month, with a drop in both Chinese and Japanese tourists due to a number of issues including the deployment of the THAAD missile defense systems and heightened tension with North Korea.
Ashley Song (email@example.com)