China unlikely to stop THAAD retaliation
By Yi Whan-woo
China will likely continue its economic retaliation against Korea after their leaders failed to narrow the gap over the deployment of a U.S. Terminal High Altitude Area Defense (THAAD) battery here.
Analysts remained skeptical about Presidents Moon Jae-in and Xi Jinping reaching an agreement over the THAAD row in their possible summit in August to mark the 25th anniversary of bilateral diplomatic ties.
They said the two leaders failed to narrow their differences on the issue in their first meeting on the sidelines of the G20 summit in Germany last week.
“It won’t be easy. It will take time,” said Park Won-gon, a professor of international relations at Handong Global University. “China’s retaliation will continue and could become more severe.”
Kim Hyun-wook, a professor at Korea National Diplomatic Academy, agreed by saying, “It won’t be resolved in a short period of time.”
He said Xi’s reputation will “fall into disgrace” if he abruptly decides to drop punitive measures against Seoul, as he explicitly opposed THAAD in front of Moon as well as U.S. President Donald Trump and Russian President Vladimir Putin during the G20 summit.
“With the upcoming National Congress of the Communist Party of China, Xi may not want to do anything that can risk his political career,” Kim said.
Sources familiar with Korean firms speculated that they will pull their businesses out of China if Moon and Xi continue to remain deadlocked in their next talks, possibly around Aug. 24.
“The firms must have been disappointed about the Moon-Xi summit last week, and so the two countries should try to come up with something productive next month,” a source said.
Park suggested forming a working-level consultation body to discuss possible conditions that can settle the THAAD dispute.
“For instance, Seoul and Beijing, in negotiations with Washington, can formally agree to pull the THAAD battery out of Korea if Pyongyang’s ballistic missile threats diminish. And the consultation body can discuss how it can define diminished threats from the Kim Jong-un regime,” Park said.
He said the U.S. should intervene over the THAAD row, adding “It will make things much easier.”
China accounts for over 20 percent of Hyundai Motor Group’s exports.
And the year-on-year sales of its two affiliates ― Hyundai Motor and Kia Motor ― to China dropped 42.4 percent and 54.6 percent in the first half of the year, respectively.
The gross loss to Hyundai Motor Group is expected to reach 12 trillion won ($10.4 billion) this year should its China sales continues to stagger in the second half.
More than 70 of the 99 stores operated by Lotte Mart, a retail arm of Lotte Group, have been placed under suspension in China after Lotte Group sold its golf course in Seongju, North Gyeongsang Province, to the military to set up THAAD.
The number of Chinese tourists to Jeju Island this month is expected to decrease by 80 percent to 90 percent from 2016, according to the Jeju provincial government.