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Quick Take | Beyond THAAD: the real reason why China is angry with South Korea

North Korea may just be the symptom, the changing nature of bilateral economic ties is what is really driving the current drift in relations

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A few Chinese tourists walk along a parth on Jeju Island in South Korea. Handout Photo
Empty shops, deserted streets and silent restaurants make for an unusual Jeju this “Golden Week” holiday. The so-called Hawaii of South Korea has been bearing the brunt of China’s anger, with Beijing banning travel agencies from selling package tours to South Korea in protest against Seoul’s decision to deploy an American missile defence system.

Once a favourite destination of Chinese tourists – who comprised 90 per cent of Jeju’s tourist footfall – the island has since turned into a ghost town. Jeju’s problems embody the tensions between China and South Korea, which marked the 25th anniversary of establishing diplomatic relations this August. The 15th and the 20th anniversaries were celebrated with lavish high-profile joint events underscoring rapidly growing bilateral ties.

Seoul wants THAAD, but do Koreans?

Five years ago then Chinese vice-president Xi Jinping paid a visit to the South Korean embassy in Beijing along with Foreign Minister Yang Jiechi with great fanfare. This time, no joint events were held. The highest-ranking Chinese official to attend a reception at the South Korean embassy was the science and technology minister. The Chinese media barely covered the event.
President Xi Jinping exchanged congratulatory messages with his South Korean counterpart Moon Jae-in. But in contrast to Moon’s message focusing on the achievements and prospects of their bilateral ties, the Chinese leader emphasised his readiness to address the differences between the two countries.
Terminal High Altitude Area Defence interceptors are seen as they arrive at Seongju, South Korea. Photo: Reuters
Terminal High Altitude Area Defence interceptors are seen as they arrive at Seongju, South Korea. Photo: Reuters
China clearly won’t let South Korea forget its displeasure at the deployment of THAAD (Terminal High Altitude Area Defence), which China insists can be used to spy on its own missile programmes. The approval of the system deployment was given by Moon’s predecessor Park Geun-hye in July 2016. The first two THAAD batteries went operational in April this year. In the wake of escalating North Korean provocations, the Moon administration is to deploy four more. In retaliation, Beijing is effectively embarking on economic sanctions. Apart from the pullback of Chinese tourists, Lotte’s business in China has taken a hit, while sales of Korean restaurants in the Beijing area have plunged by a third year-on-year and sales of Hyundai and Kia Motors have fallen by half. Many small and medium-sized Korean businesses in China are leaving the country.

Opinion: Why China’s shadow boycott of South Korea is self-defeating

All of this makes this the toughest time for Sino-South Korean relations since the establishment of diplomatic ties in 1992, compounded by the onset of an economic rivalry. The 1992 diplomatic breakthrough was followed by an economic and geopolitical honeymoon. While business ties dramatically expanded, Seoul moved from relying completely on the United States to balancing between Washington and Beijing. A stand-off with Japan over history textbooks, comfort women and disputed territories also helped to bring it closer to China. In September 2015, President Park was the only Washington ally to attend a commemorative military parade on Tiananmen Square.

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