- Associated Press - Friday, March 3, 2017

BEIJING (AP) - Beijing’s escalating condemnation of South Korea over a U.S. anti-missile system has triggered protests against a popular retail giant and a reported ban on Chinese tour groups visiting the country, apparent signs that Beijing plans to make Seoul pay an economic price over a move that China says threatens its security.

Protests have sprung up in the last few days against Lotte Mart, a South Korean hypermarket chain that sells food, clothing, toys and electronics. Its parent company, Lotte Group, agreed Monday to provide a golf course to the government to site the system. The protests outside Lotte stores and boycotts of its products follow weeks of condemnation of the South Korean government and warnings against Lotte’s move by government officials and state media.

Seoul and Washington say the system is needed to defend against North Korea’s missile threat and is not targeted at any other regional states. China says the Terminal High-Altitude Area Defense, or THAAD, threatens its security because its radars are capable of peering deep into the country’s north and parts of Russia, allowing Washington and Seoul to monitor flights and missile launches.

Asked about the protests, Chinese foreign ministry spokesman Geng Shuang said Friday: “There are absolutely no anti-THAAD campaigns in China, still less violent campaigns.” He added that Beijing hoped Seoul “can heed the voice of the people and take effective measures to avoid further damage to the China-South Korea relationship.”

China is South Korea’s largest trading partner and a key source of inbound tourism, leaving it vulnerable to Chinese economic disruptions.

Following weeks of rumors, South Korea’s state-run tourism agency said Friday that travel agents in China said they had been told to stop selling group trips to South Korea.

About 8 million Chinese tourists visited South Korea last year, accounting for nearly half of the 17.2 million total foreign tourists to the country, according to the state-run Korea Tourism Organization. A survey of 6,000 Chinese tourists in 2015 found about 40 percent came in package group tours, the tourism agency said.

China National Tourism Administration did not immediately respond to faxed questions.

Following government statements against Lotte, a food producer in central Henan province’s Luohe city, Weilong Food, said it was pulling its products from Lotte stores, while retailer Ruixiang said it would stop purchasing South Korean products and called Lotte “an immoral corporation.”

Chen Ou, the chief executive of Jumei, a Chinese cosmetics company, announced on his Sina Weibo account that they had stopped selling hundreds of Lotte products.

China’s commerce ministry spokesman Sun Jiwen on Thursday reiterated that China attached “great importance to economic and trade cooperation with South Korea and welcomes foreign investment from foreign companies, including Korean companies. But, he added without eleboration, that applied “only if the companies concerned operate according to Chinese regulations.”

Beijing has also leveled its sights at South Korean entertainment exports that are enormously popular in China. Industry insiders say Chinese companies have been told they can no longer purchase new South Korean dramas or other TV shows, or invest in new co-productions with South Korean movie and program makers.

Public protests have included one last weekend outside a Lotte Mart in the northeastern province of Jilin in which people held up a long banner which read “South Korea’s Lotte declares a war against China; Lotte supports (the anti-missile system); get out of China now!”

The Lotte conglomerate operates 99 big discount chain stores, 13 small supermarkets and five department stores in China.

Chinese authorities have stepped up inspections on its businesses in recent months, checking for tax and building code violations. The construction of its shopping and entertainment complex in Shenyang city was halted in November after an inspection found some lapses. Lotte is fixing those lapses before applying for a permission to resume construction.

The company said it had no comment Friday, but one of its units, Lotte Duty Free, said that its shopping websites were knocked offline Thursday by what it believed to be a cyberattack from Chinese IP addresses. The duty free store operator said it took more than six hours to recover.

“We estimate the damage to be as much as several hundreds of million won,” it said in a statement, the equivalent of about $90,000.

On Friday, investors concerned about possible retaliation dumped shares in South Korean companies that rely on trade with China. South Korea’s largest cosmetics company, Amorepacific, which counts China as its key business, sank more than 10 percent, and tourism companies also fell.


AP writers Youkyung Lee and Hyung-jin Kim in Seoul, and researcher Yu Bing and news assistant Liu Zheng in Beijing, contributed to this report.

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