Business

S. Korea bears the brunt of China's displeasure

BEIJING Slapping import bans on products like mangoes, coal and salmon has long been China's way of punishing countries that refuse to toe its political line.

But Beijing has shown that it can also hurt others by cutting a lucrative Chinese export: tourists who normally flock to South Korea or Taiwan.

Ramping up pressure on Seoul to abandon the US anti-missile shield - the Terminal High-Altitude Area Defence (Thaad) system - which it sees as a threat to its own military capability, Beijing has banned Chinese tour groups from going to Korea, and closed down duty-free shops of retail giant Lotte Group, which has been targeted for providing land for the controversial defence system.

Lotte also suffered setbacks in several of its Chinese ventures - from the government-ordered halt of a US$2.6 billion (S$3.6 billion) theme park project to apparent cyberattacks on company websites.

"If you don't do what Beijing's political leaders want, they will punish you economically," said Mr Shaun Rein, founder of Shanghai-based China Market Research Group.

Seoul-based tour operator Korea-China International Tourism has reported an 85 per cent drop in tourists in recent months.

The company usually receives 4,000 mostly Chinese visitors a month, but that has fallen to around 500 after Beijing warned tourists about the risks of travelling to the South, and ordered Chinese tour operators to stop sending groups there.

- AFP

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