Chinese protest against South Korea’s Lotte Group after land deal for THAAD missile-defense system

AFP-JIJI, Reuters Mar 5, 2017

Dozens of people holding posters showing late Chinese Communist Party Chairman Mao Zedong protested in northeastern Jilin province on Sunday, calling for a boycott of South Korean goods as part of a backlash against the country’s Lotte Group.

The retail giant has faced growing opposition in China since signing a deal last Tuesday to provide land for a U.S. missile-defense system.

The plan to install the Terminal High-Altitude Area Defense (THAAD) system was prompted by threats from North Korea, but Beijing fears the move will undermine its own military capabilities.

“No to THAAD! Boycott Korean goods!” chanted the protesters.

“Patriotism starts with me! Long live the Communist Party!”

Similar protests have sprouted across the country as Lotte suffers setbacks in several of its Chinese ventures — from last month’s government-ordered halt of a $2.6 billion theme park project to apparent cyber-attacks on company websites.

Citing fire violations, authorities in Liaoning Province’s Dandong City have also suspended the operation of Lotte Mart, the Yonhap news agency reported Saturday.

Earlier last week, major tour operators confirmed that trips to South Korea have been suspended “due to policy and safety factors.”

China has repeatedly denounced THAAD as a threat to its security, with a Foreign Ministry spokesman saying “the consequences entailed will be borne by the U.S. and the Republic of Korea.”

Calls are growing in China for Beijing to use the carrot and stick of its huge market to raise pressure on South Korea to abandon the THAAD plan.

The stakes are high for Lotte, which has invested more than 10 trillion won ($8.7 billion) in its Chinese operations since 1994.

Earlier Sunday, South Korea’s trade minister said the government’s responses against discriminating action by China toward South Korean companies will be strengthened and he feels “deep concern” over recent measures taken by Beijing.

Trade Minister Joo Hyung-hwan made the statement while visiting the United States, the ministry said in a statement.

South Korean media said last week Chinese government officials had given verbal guidance to tour operators in China to stop selling trips to South Korea days after the Seoul government secured land for the THAAD system from Lotte.

China objects to the deployment, saying its territory is the target of the THAAD’s far-reaching radar. South Korea and the United States have said the missile system is only aimed at curbing North Korean provocations.

“We will act according to international law against any actions that violate policies of the World Trade Organization (WTO) or the free trade agreement between South Korea and China,” Joo said.

The Trade Ministry said it will start examining exports to China on a daily basis and any changes to South Korean exporters who do business with China in order to respond as quickly as possible against unfair action.

On Friday, it requested to the Chinese Embassy in Seoul that South Korean companies investing in China be protected and be shown care.

Data last week showed South Korean February exports to China, its biggest trade partner, posted the best growth since late 2010, driven by sales of intermediate goods such as semiconductors and display panels used for electronics manufacturing.

Economists say the THAAD-related backlash is not expected to significantly harm exports to China in the short term as a bulk of the shipments are intermediate goods, which China uses to manufacture finished products and ships to other countries.

However, government officials are warily watching if diplomatic tensions grow further between South Korea and China at a time when global protectionism is rising.

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