Firstly, widespread inspections are being carried out on Korean enterprises, primarily those owned by Lotte Group’s Chinese representative office, on whose golf course the first part of the system will be deployed. There are reports that the Tax Inspectorate initiated this move on November 1, without prior warning, in the company’s headquarters in Shanghai. The inspection was carried out by the city, not the district tax office, as it was done earlier. According to the Company, approximately 150 branches and representative offices of Lotte Group in Beijing, Shanghai, Chengdu and other cities in China became subjects to tax, fire, and sanitary inspections. Thorough inspections are also underway on Chinese factories of Lotte Chemical and Lotte Confectionery; and a large number of Lotte malls were closed as the result, as “under the law, the requirements of which everyone, including the Korean manufacturers, must fulfil.”
Secondly, the Korean show industry began to suffer. South Korean artists are forbidden to star in China; advertising contracts featuring them are terminated or discontinued. Since October 2016, not a single permit was issued for a South Korean pop star concert; no South Korean film was shown in cinemas. Notice that the Chinese market has long been one of the most important for the Korean film and music industry. This means that there are losses worth millions.
Thirdly, the Chinese government has abolished the 30 kg free-of-duty baggage for tourists, and has banned (until the end of March 2017) charter flights of South Korean airlines to China and similar flights of its air carriers to the Republic of Korea. This dealt a severe blow to the South Korean tourist industry. The Chinese are the first among foreigners coming for short-time trips, and according to bloggers from the Republic of Korea, the number of Chinese buyers at night wholesale markets in Seoul fell by 80%.
Besides, in November 2016, Chinese authorities instructed their travel companies to reduce the number of tourists to South Korea by twenty percent.
It is certainly yet not time for pogroms at South Korean companies (as was the case with the Japanese during the last exacerbation). However, South Korean bloggers and media mention flimsy reasons of non-conformity with component standards at Hyundai Corporation factories, the ban on some Korean food imports, as well as non-tariff barriers or other rules that may handicap Korean products.
As a Chinese expert on the Korean Peninsula that asked to remain anonymous explained a Rossiyskaya Gazeta correspondent, the Koreans were warned not to do so, and it was stressed that US missile defence system on the Korean Peninsula poses a threat to the strategic interests of Beijing. Nevertheless, Seoul ignored these warnings, thinking it might escape responsibility by empty words like “THAAD is not aimed against China or Russia”.
“As we warned, we would not forgive this unfriendly step by Korea. The steps which made the South wince is just the beginning,” they say in China.
Against this backdrop, South Korean opposition has also livened up, especially since Park Geun-hye’s impeachment and a good chance of having its presidential candidate allow them to count on the possibility of reversing the decision by the country’s outgoing leader. Under these circumstances, the Toburo Democratic Party called for the government to postpone the decision, stating that the issue should be left for consideration by the next administration, as the current political conditions are unsuitable for that purpose.
Moreover, in January 2017, seven deputies from the Party flew to Beijing to hold talks with Chinese officials and experts, urging them to hold off the pressure until the election of the new president of Korea. They were received at a very high level, with exclusive opportunities to hold talks with the Minister of Foreign Affairs Wang Yi and representatives of the International Liaison Department of the Communist Party of China’s Central Committee.
It is interesting to note that some of the South Korean conspiracists have already seen the hand of Beijing in these calls (and some even in the whole scandal), which, so to say, decided to borrow the US experience of colour revolutions to overthrow the pro-American government. From the point of view of the author, this does not seem very probable. Besides, it should be understood that the scandal was not so much the reason but the subject for openly splashing the dislike on Park Geun-hye, which a number of social groups were accumulating.
However, the official Seoul firmly stands on its own. In a situation where Pyongyang’s nuclear and missile programs are posing a real security threat to South Korea, the US-made THAAD missile defence system should be deployed in the south of the Korean Peninsula as soon as possible. This was stated by the acting president, Prime Minister of South Korea, Hwang Kyo-ahn, in his recent speech at the National Assembly hearing. Delaying the plan is unacceptable due to national security interests, despite the opposition’s calls to postpone the deployment of the THAAD missile defence system due to the lack of national consensus, as well as the Chinese countermeasures.
The Commander of US military forces in Korea, General Vincent K. Brooks, also believes that plans to deploy the US THAAD missile defence system in the south of the Korean Peninsula have not been changed in spite of the political crisis. White House Press Secretary, Josh Earnest, was even clearer: US commitment to ensure the security of the ROK citizens remains unchanged during the transfer of presidential powers in both countries.
Following this, on December 26, a representative of the ROK Ministry of Defence said that the Seongju golf course would be shut down in December, and that the owners would begin preparing for the transfer of that piece of land to the military, which in return, intend to transfer land of the corresponding value to Lotte International. On January 5, the Republic of Korea Foreign Ministry Spokesperson, Cho Joon-hyuk, said: “Placing THAAD complexes is a defensive measure to ensure the security of the nation and our citizens, and to protect sovereignty of our country from North Korean nuclear and missile threats.” At the same time, the Chinese ambassador in Seoul was summoned to the Foreign Ministry of the Republic of Korea, and Deputy Foreign Minister of Korea, Kim Hong-kyun, voiced a similar position of the ROK Government to him.
As for the replies to Beijing, the Chinese Ambassador to ROK Qiu Guohong was summoned to the ROK Foreign Ministry, where Deputy Minister and Special Representative for Korean Peninsula Peace and Security Affairs Kim Hong-kyun has expressed concern of official Seoul about Beijing’s measures. However, the next day the Chinese media have made it clear that Beijing could make another blow and limit sales of South Korean cosmetics. Seoul has been called ‘the vanguard of the American expansion in East Asia’ in case the US missile defense system is deployed.
Apparently, the situation is not yet completely over, and we will see whether it will not eventually turn into a full-scale trade war.
Konstantin Asmolov, Ph.D., Senior Research Fellow at the Centre for Korean Studies at the Institute for Far Eastern Studies, exclusively for the online magazine “New Eastern Outlook“
