World Economy

South Koreans Say THAAD Row Hurting Businesses

South Koreans Say THAAD Row Hurting BusinessesSouth Koreans Say THAAD Row Hurting Businesses

A majority of businesses in the content, tourism and retail sectors said they are suffering from the ongoing spat between South Korea and China over the deployment of a US missile defense system, a survey showed Sunday.

According to the survey conducted on 597 firms in those sectors by the Korea International Trade Association, 56.2% of the respondents said that China’s apparent economic retaliation has already “negatively affected” their businesses, with 32.9% responding that they would feel the pinch of the harsh measures by China in the next three months, Yonhap reported.

Seoul agreed to host an advanced US missile defense battery, known as the Terminal High Altitude Area Defense system, on its soil in July last year. Beijing has strongly denounced the deployment, claiming that its high-power radar will be used to spy on its military.

Early this month, South Korea’s biggest trading partner banned the sale of tour packages and subsequently forbid local air carriers from increasing Korea-bound flights, among other restrictions.

Such a slew of hostile policies have stoked concerns that local tourism and retail firms will be the biggest victims of the dispute.

Last year, Chinese tourists accounted for nearly half of some 17.2 million foreigners who visited South Korea.

Some 40% also cited a delay in granting business permits by Chinese authorities as the biggest damage, with 36% saying they have been hurt by the cancellation or delays of scheduled events, it showed.

The survey also showed that Beijing’s economic retaliation measures may be drawn out, with 44% expecting them to continue into the second half of the year. Some 22% even predicted the hostile measures may be stretched into next year, it showed.

The South Korean economy looks poised to take a blow from the diplomatic row over the deployment of a US missile defense system on the Korean peninsula, but the overall impact will likely be short-lived, based on similar experiences from Taiwan and Japan, analysts say.

“Beijing views the planned deployment as a kind of betrayal by South Korea and potentially the first significant step toward the creation of a bigger missile defense system involving Japan to contain China,” said Kevin Lai, an analyst for Daiwa Capital Markets, in Hong Kong.

Travel curbs imposed by Beijing could have a negative impact on the South Korea economy, he added.


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