By Andrei Lankov
South Korean tour operators, duty-free shop managers and restaurant owners are becoming uneasy ― they are losing what for years have been their most-profitable clientele. The Chinese are not coming in the large numbers to which the industry is accustomed.
It is an open secret what has happened. In July 2016 the ROK government confirmed its willingness to deploy the THAAD missile defense system, greatly enraging Beijing. Shortly after, Chinese tour agencies began to get phone calls from local officials who advised them to reduce the number of Chinese nationals they send to South Korea.
Chinese business people understand that it is unwise to ignore such warnings. Thus the tour agencies followed the advice ― as the Korean tourist industry soon discovered.
The impact has been felt in major tourist areas in Seoul, which for years were packed with Chinese tourists. However, it would be pointless for the ROK embassy to lodge an official complaint. Beijing can easily deny it has taken any action one way or another, and South Korea cannot prove anything.
South Korean actors, actresses, and pop singers suddenly discovered that their scheduled events in China were frequently canceled. THAAD was not mentioned at all, but it was not hard to recognize what was going on.
Leaks reveal that in recent months, Chinese authorities suggested that Chinese companies should restrict the scale of cultural interaction with South Korea. For South Korea's private sector, this means a significant loss of revenue, as many Seoul celebrities and entertainment companies had very lucrative contracts in China.
Other victims of the ongoing crackdown are small Korean firms that operate in China. Historically, most such businesses have been clustered in Beijing's Wangjing area.
In recent months Wangjing shop owners, bar and karaoke club managers have complained of unprecedented numbers of surprise inspections. Chinese police or health inspectors check for the smallest infringement. If any infringement is found, the firm in question faces an unusually harsh, if technically legal, punishment.
My Chinese contacts, when talking privately, do not feel afraid to talk about these developments. They are angry about THAAD and they make it quite clear that this is just the beginning. Pressure, they warn, will likely escalate much further if the next Korean administration does not cancel the THAAD deal.
Major Korean companies operating in China are probably going to suffer the same problems that Wangjing entrepreneurs struggle with now: random checks and inspectors who look for the smallest violations of all codes and regulations. No stone will be left unturned. Something wrong is likely to be found in most cases, so the South Korean firms will find themselves in seriously hot water.
One cannot rule out, for example, that ever-vigilant Chinese sanitary inspectors will suddenly discover grave health concerns stemming from some imported South Korean products. I will not be surprised in the least if at some point next year we suddenly learn that the latest version of the Samsung Galaxy emits dangerous electromagnetic waves forcing the immediate postponement of all its sales in China.
For South Korea this is a new and uncomfortable reality. The South Korean businesses are familiar with interacting with the U.S. and other Western states, where sanctions, if implemented, are transparent and predictable, and can be challenged in court.
This is not the case in China, which prefers to implement sanctions in opaque, stealthy ways. Such oral instructions or classified papers cannot be challenged in court because they do not legally exist. Further, China is likely to make exceptions from time to time, making for seemingly random, non-uniform application that delivers the message with greater clarity.
There are a few ways for South Korea to deal with such situations, none of which are particularly attractive.
First, it can bow to the pressure, showing its vulnerability and inviting more outside influence over its domestic policies. Second, it can bite the bullet and take the economic contraction, thus creating tangible hardships for a significant portion of its population. Third, it could try counter sanctions, but given the nature of both societies and the respective scale of the respective economies, such sanctions are highly unlikely to succeed. So, the situation is difficult, with no easy solution ― in other words, typical of the world we live.
Andrei Lankov was born in St. Petersburg, Russia, and teaches at Kookmin University in Seoul. Reach him at anlankov@yahoo.com.
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It is an open secret what has happened. In July 2016 the ROK government confirmed its willingness to deploy the THAAD missile defense system, greatly enraging Beijing. Shortly after, Chinese tour agencies began to get phone calls from local officials who advised them to reduce the number of Chinese nationals they send to South Korea.
Chinese business people understand that it is unwise to ignore such warnings. Thus the tour agencies followed the advice ― as the Korean tourist industry soon discovered.
The impact has been felt in major tourist areas in Seoul, which for years were packed with Chinese tourists. However, it would be pointless for the ROK embassy to lodge an official complaint. Beijing can easily deny it has taken any action one way or another, and South Korea cannot prove anything.
South Korean actors, actresses, and pop singers suddenly discovered that their scheduled events in China were frequently canceled. THAAD was not mentioned at all, but it was not hard to recognize what was going on.
Leaks reveal that in recent months, Chinese authorities suggested that Chinese companies should restrict the scale of cultural interaction with South Korea. For South Korea's private sector, this means a significant loss of revenue, as many Seoul celebrities and entertainment companies had very lucrative contracts in China.
Other victims of the ongoing crackdown are small Korean firms that operate in China. Historically, most such businesses have been clustered in Beijing's Wangjing area.
In recent months Wangjing shop owners, bar and karaoke club managers have complained of unprecedented numbers of surprise inspections. Chinese police or health inspectors check for the smallest infringement. If any infringement is found, the firm in question faces an unusually harsh, if technically legal, punishment.
My Chinese contacts, when talking privately, do not feel afraid to talk about these developments. They are angry about THAAD and they make it quite clear that this is just the beginning. Pressure, they warn, will likely escalate much further if the next Korean administration does not cancel the THAAD deal.
Major Korean companies operating in China are probably going to suffer the same problems that Wangjing entrepreneurs struggle with now: random checks and inspectors who look for the smallest violations of all codes and regulations. No stone will be left unturned. Something wrong is likely to be found in most cases, so the South Korean firms will find themselves in seriously hot water.
One cannot rule out, for example, that ever-vigilant Chinese sanitary inspectors will suddenly discover grave health concerns stemming from some imported South Korean products. I will not be surprised in the least if at some point next year we suddenly learn that the latest version of the Samsung Galaxy emits dangerous electromagnetic waves forcing the immediate postponement of all its sales in China.
For South Korea this is a new and uncomfortable reality. The South Korean businesses are familiar with interacting with the U.S. and other Western states, where sanctions, if implemented, are transparent and predictable, and can be challenged in court.
This is not the case in China, which prefers to implement sanctions in opaque, stealthy ways. Such oral instructions or classified papers cannot be challenged in court because they do not legally exist. Further, China is likely to make exceptions from time to time, making for seemingly random, non-uniform application that delivers the message with greater clarity.
There are a few ways for South Korea to deal with such situations, none of which are particularly attractive.
First, it can bow to the pressure, showing its vulnerability and inviting more outside influence over its domestic policies. Second, it can bite the bullet and take the economic contraction, thus creating tangible hardships for a significant portion of its population. Third, it could try counter sanctions, but given the nature of both societies and the respective scale of the respective economies, such sanctions are highly unlikely to succeed. So, the situation is difficult, with no easy solution ― in other words, typical of the world we live.
Andrei Lankov was born in St. Petersburg, Russia, and teaches at Kookmin University in Seoul. Reach him at anlankov@yahoo.com.
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