Resetting Korea-China tiesChina is unrelenting in its economic retaliation for South Korea’s deployment of the Terminal High Altitude Area Defense (Thaad) system.
We are appalled by the high-handed way China is punishing a neighbor, as if it is a vassal in the feudal days. Fundamentally, we must seek alternative markets and strengthen the competitiveness of our brands.
Washington has slapped a record $1.19 billion fine on China’s telecommunication equipment provider ZTE for breaching U.S. export control laws in selling products and services to North Korea and Iran as a kind of punitive action on Beijing’s response to Thaad. But we do not have such a powerful response mechanism.
We have warned ourselves of the risk of too much reliance on the Chinese economy, but have been complacent. We are now forced to seek new markets. The pitiful consequence of complacency is the shutdown of the Nanta performance theater and an empty Jeju.
We must draw other Asian tourists. Taiwan turned to Southeast Asians after visitors from the mainland ceased going there when the new government proved unyielding to Beijing’s will. Japan and Norway shifted to develop alternative markets after China’s vengeful ban on rare earths and salmon.
Consumer products like cosmetics and food, tourism, online shopping, retail and entertainment have been hit by China’s sanctions. Trade data would be less hurt as intermediary and capital products make up more than 70 percent of exports to China. But because China’s growth is stalling and accelerating localization, prospects for exports are also murky. Korea Inc. must develop other markets such as India, Africa and Latin America.
Korea and China have benefited since normalizing diplomatic relations a quarter of a century ago. Korean companies have capitalized on favorable terms to make products cheap. China’s spending helped bolster Korea’s domestic demand. The two countries have become strategic and comprehensive partners. China is Korea’s biggest trading partner, and Korea is the fourth largest trader with China.
But China’s actions raise the question of its genuine consideration of Korea. China is turning from the world’s largest industrial powerhouse to the largest consumer market. We must overhaul our economic relationship with China. The state and private sector should join forces to develop new markets and retail and sales network as well as fine-tuning export and corporate support system.
JoongAng Ilbo, March 9, Page 30