China’s Thaad backlash hurts Jeju, says BOKJeju’s tourism industry appears to have been affected by the Chinese backlash over the deployment of a U.S. missile defense system in South Korea, a study by the Korean central bank indicated.
A report released by the Bank of Korea’s Jeju office Thursday noted that the number of Chinese tourists visiting during the Lunar New Year holidays between Jan. 27 and Feb. 2 dropped 6.7 percent from 51,000 last year to 48,000.
But the overall number of foreign tourists visiting Jeju for the holiday was the same as the previous year thanks to an increased inflow of Southeast Asians.
According to the report, the number of Singaporeans that visited Jeju during the Lunar New Year holidays surged 72.3 percent year-on-year while those from Malaysia rose 65.6 percent. During the same period Korean visitors increased 38.9 percent, sharper than last year’s 12.4 percent.
“One of the reasons for the decline of Chinese tourists is because of changes in travel patterns, with younger people preferring to travel individually rather than in groups,” said a BOK official. “But also it seems the backlash over the deployment of the Thaad [Terminal High Altitude Area Defense] system contributed to the decline in the number of Chinese tourists.”
The report noted that while Chinese who traveled to the island on cruises increased sharply, the number traveling by plane declined. The Chinese government cancelled a substantial number of flights traveling to Jeju, especially chartered flights.
When compared to last year, non-scheduled flights from China to Jeju dropped 50 percent while even scheduled flights decreased 10.2 percent.
On Dec. 30, Beijing announced that it was pulling the plug on eight non-scheduled flight routes of three Korean airliners including Jeju Air.
China’s retaliation has been felt by many Korean industries.
According to data released by China’s General Administration of Quality Supervision, Inspection and Quarantine on Tuesday, out of 68 cosmetics products that were denied entry by the Chinese government in December last year, 19 were Korean.
Australia actually topped the list with 22 products denied entry to the Chinese market. But the Australian products were largely soaps, while the Korean products were cosmetics including base makeup and essences. Last November, 19 Korean products were denied entry.
After the blockades on Korean goods, the stock prices of Korean cosmetics companies started to fall.
The largest Korean cosmetic company, AmorePacific, saw its shares fall 3.9 percent on Wednesday. They remained nearly unchanged, dipping 0.18 percent on Thursday.
“Tension is rising as some interpret the denial of Korean products as China’s retaliation against Thaad,” said Kang Soo-min, a CAPE Investment & Securities analyst.
“But it is difficult to blame it all on Thaad. There’s a move in China to implement policies that would boost the domestic market. Additionally, the products that were on the disqualified list didn’t include those made by major Korean companies, including AmorePacific and LG Household & Healthcare.”
BY LEE HO-JEONG [email@example.com]
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