Fears of Chinese backlash over missile defence hit South Korean firms

Chinese tourists walk in the Gyeongbok Palace in central Seoul, South Korea, October 5, 2016. REUTERS/Kim Hong-Ji

Chinese tourists walk in the Gyeongbok Palace in central Seoul, South Korea, October 5, 2016. REUTERS/Kim Hong-Ji

By Hyunjoo Jin and Adam Jourdan | SEOUL/SHANGHAI Fri Mar 3, 2017 | 6:41am EST

South Korean companies on Friday bore the brunt of a perceived backlash from China over the deployment of a U.S. missile system outside Seoul, with shares tumbling on media reports of Beijing telling tour operators to stop selling trips to the country.

Several of Korea’s biggest news outlets cited unidentified sources as saying Chinese government officials had given the verbal guidance just days after the Seoul government secured land for the missile system from Lotte Group.

South Korea and the United States say the missile system is defence against nuclear-armed North Korea, but China says its territory is the target of the system’s far-reaching radar. To protest the deployment, Chinese state-run media have called for a boycott of South Korean products.

The Chinese are by far the biggest spenders in South Korea’s tourism industry, propping up the world’s biggest duty free market which generates about $8 billion in annual sales.

But on Friday, the price of shares in duty free retailer Hotel Shilla Co Ltd ended 13 percent lower while cosmetics maker Amorepacific Corp closed at a two-year low, as investors feared a decline in Chinese tourist dollars as well as a repeat of a backlash against Japan in 2012 over a territorial dispute and interpretations of history.

The share falls add to difficulties reported by South Korean companies in China since the Seoul and Washington governments in July agreed to deploy the Terminal High Altitude Area Defense (THAAD) system. On Thursday, an affiliate of the Lotte Group reported cyber attacks ostensibly originating from China.

Shares of Hyundai Motor Co also finished down 4.4 percent after photos of a vandalised Hyundai car circulated on Chinese social media, in an echo of the damage meted out to Japanese vehicles during protests in 2012.

Local police in a microblog post said the vandalism could be linked to a dispute over debt.

“If it is proved to be related to (the missile issue), such illegal behaviour is a smear on the public boycott campaign,” state-run tabloid Global Times said in an editorial.

South Korea’s embassy in China issued a safety warning for its citizens.

Chinese foreign ministry spokesman Geng Shuang on Friday said there was no anti-deployment movement in China, and that authorities would deal with anyone breaking the law.

“I hope the relevant side can listen to the people’s voices and earnestly take steps to avoid further damage to China-South Korea relations and exchanges and cooperation between the two countries,” Geng said.


South Korean foreign minister Yun Byung-se said he was reviewing whether the guidance mentioned in the media violate international norms, Yonhap News Agency reported.

“If such reports are true, it would be an unfair action … and very regrettable,” the foreign ministry said earlier on Friday.

An official at South Korea’s culture ministry said Korean tour operators had reported that Chinese peers had told them of the guidance to stop selling tours.

A Korean tourism official later told Reuters that the China National Tourism Administration (CNTA) had told tour operators in Beijing and beyond that all group tours to South Korea as well as advertising were banned. The official also said group tours made up about 40 percent of all Chinese visitors to South Korea last year.

CNTA did not immediately respond to a request for comment.

Chinese operators Ctrip and Qunar were accepting bookings to Korea on Friday. A salesperson at LY.com said the site has withdrawn all Korean tours, and Tuniu declined bookings citing the missile issue. LY.com could not be reached for comment, and Tuniu’s spokesperson did not immediately respond to comment.

The number of Chinese tourists to South Korea has nearly quadrupled to 8 million over the past five years, accounting for nearly half of foreign visitors, Korean government data shows.

Yet shares of flag carrier Korean Air Lines Co Ltd also ended down on Friday, by 4.8 percent. A spokesman said the airline was worried about the reports and was monitoring the situation.

South Korean political parties condemned the action.

“It’s despicable and arrogant. China is a G20 nation that should be leading the development of world order,” Liberty Korea Party leader Chung Woo-taik said.

But for Professor Wu Xinbo at China’s prestigious Fudan University, the deployment was akin to “stabbing China in the back”.

“As a sovereign nation, Korea says its decision to deploy THAAD is out of consideration for national security,” Wu told the Global Times. “By the same logic, China has the right to oppose THAAD on the basis of its own national security.”

(Reporting by Hyunjoo Jin in SEOUL and Adam Jourdan in SHANGHAI; Additional reporting by Joyce Lee, Jack Kim, Ju-min Park and Se Young Lee in SEOUL, Ben Blanchard and Muyu Xu in BEIJING, and Christian Shepherd in HONG KONG; Editing by Stephen Coates and Christopher Cushing)

Source: Reuters “Fears of Chinese backlash over missile defence hit South Korean firms”

Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


5 Comments on “Fears of Chinese backlash over missile defence hit South Korean firms”

  1. johnleecan says:

    Mainlanders should know better to patronize China’s brands and stop touring countries hostile to China. No need for government announcement. No sense in buying China’s enemies’ brands. Be it American, now South Korea and especially the brutal, sadistic and inhuman Japanese. Buying their products to show off and/or afraid other people will look down on them is simply outrageous.

    Mainlanders are surprised when we overseas Chinese tell them that we, as much as possible, would buy China’s brands because we want China to surpassed every nation in economy and military strength.

    Yes, we know if ever there’s a crisis of anti-Chinese in our country, China will do nothing to help us because we are of different nationality. Yet, we will still help, support or even criticize China because one should never forget their Chinese roots.


  2. Fugu says:


    “South Korean foreign minister Yun Byung-se said he was reviewing whether the guidance mentioned in the media violate international norms, Yonhap News Agency reported.

    “If such reports are true, it would be an unfair action … and very regrettable,” the foreign ministry said earlier on Friday.”

    You must be joking, Mr Yun. Your government can issue an order allowing U.S. THAAD’s missile and radar system on South Korea soil targeting China but the Chinese government cannot issue a “guidance” to tour agencies to discourage organizing further tours to South Korea?

    You have not ground for defence. Your hypocrisy is lame, really lame.

    We are all fine sovereign fellows I am sure. We don’t tell each other what to do. But we certainly can tell our folks not to visit your house any more since by your action, you are no longer very hospitable. I mean, don’t ask me to go to your house when you’ve just set up a machine gun nest with a machine gunner aiming that damn fangled lethal weapon at my home and my people.

    You be responsible for your action. If you want to play the complying sidekick and goon of Washington against yours and our interest and your better judgement, just be sure you can accept the consequences. What business have you to complain when we take counter action in response to your unfriendly act. Frankly, your behaviour is no better than the North Koreans you like to depict as barbaric and uncivilized according to Washington’s script.

    Stop aiming your gun at us and perhaps we can regard you as civilized and not abberated like crazy Kim Jong-Un and his clique. If you continue to represent Washington’s neocon “China containment” policy interest however, you will pay the price.

    America took away your freedom you fought for so hard and at great cost during the Japanese invasion and colonial occupation of Korea in the 1930s. You were denied your independence as a unitary state by the U.S. when the Japanese surrendered and now, you would have Washington use you to antagonize us? Where is your pride and dignity? Frankly, I think Pyongyang has more national and ethnic pride and dignity than you South Koreans.

    So, Mr Yun and Seoul, you truly have some “soul” searching to do. What are you and who are you? A U.S. vassal or not a U.S. vassal? Take a step back or dig in? You decide. Just remember, we live here too. Do you really want to fight Washington’s neocons’ war?

    Since the univited American wolf to North East Asia wants you to aim their THAAD missile and radar at us, do bear in mind we will be aiming our missiles back at you and your people too. Thank you.


  3. Simon says:

    China can unilaterally ban coal import from N Korea just as it can ban tourists spending money in S Korea if either are a threat to its national interests.


  4. Joseph says:

    Reuters is trying to twist the fact, as usual, by focusing the issue solely on the THAAD to distort the real concerning issue. However, the THAAD issue has been around for some time now without affecting the relationship between two countries. The real reason of these harsh actions is more likely connected to upcoming Korean election to replace the impeached Korean president Park Gyunhee. Although the THAAD may be one of the factor, the real reason for China’s dissatisfaction is the ousting of Korean pro-China president Park Gyunhee by the pro-American Korean senate. Businesses such as Lotte hold lobbying influences in Korean senate, basically did nothing to intervene, most likely because they still have hope for expansion to American market for misguided prestige, so they didn’t want to offend the American. They would often forget that their Chinese market is far larger than their hopelessly projected American market. For that they should be harshly reminded. If the South Korean businesses are smart, they would reconsider their priority and fight to lobby the incoming Korean president would be a Chinese-friendly one, one that would oppose the THAAD as a good faith toward China.


  5. Steve says:

    China don’t want to be surrounded by THAAD in Japan and Sth Korea. The Korean Liberal party leader Chung Woo-Taik said that China as a G20 nation is despicable and arrogant, should be leading the development of world order. He is talking nonsense. The purpose of the G20 is to discuss key issues for the development of the Global Economy. It has nothing to do with the strategic installation and position of ballistic missiles and radar surveillance against another country.