Hyundai Motors is suffering an unprecedented ordeal in China due to the world’s second-largest economy’s retaliation against South Korea for deploying Terminal High Altitude Area Defense (THAAD), a U.S. missile defense battery.
In a boycott campaign against South Korean products, Hyundai’s sales in China dropped as much as 41 percent in the first seven months of the year, compared with last year.
The sales plunge clipped its cash flow and the automaker had no choice but to halt operations at four out of five plants due to the suspension of parts supply last week, though the plants were able to resume production thanks to emergency measures Wednesday.
Hyundai is not the sole victim of the retaliatory measures. Of 99 Lotte Marts outlets in China, 87 were forced to close for “unlikely” reasons such as violations of the Fire Services Law.
On top of the retaliatory action against Seoul’s deployment of the self-defense system is the group travel ban by the neighboring country. Economic damage caused by the anti-Korea campaign is estimated to reach 22 trillion won ($19.6 billion).
There is little doubt that the “shameful” retaliation is being orchestrated by the Chinese government and state-run media outlets are at the forefront to fan the no-buy campaign against South Korean products. Chinese leader Xi Jinping is all out to criticize Seoul over the THAAD deployment, whipping up China’s easy-to-boil national sentiment, while the media act as if parroting Xi’s line and amplifying it many times. Xi even refused to have a summit with President Moon Jae-in to celebrate the two countries’ 25th anniversary of diplomatic ties.
The Chinese government’s behavior clearly violates global trade norms and the World Trade Organization’s (WTO) ban against obstructing the market access by foreign products.
Looking into what China is doing now testifies to a simple truth that the country definitely does not deserve to be a superpower. This bullying only makes its neighbors wary of its behavior, and forces them to have doubts about China’s grand projects such as the “One Belt, One Road” that is aimed at linking the world together.