China’s true faceKorean companies in China are suffering huge losses after the South Korean government’s decision to deploy the Terminal High Altitude Area Defense (Thaad) anti-missile system. Emart, the largest retailer in South Korea, has decided to completely pull out of China after 20 years of brisk operations there largely due to its mounting losses — up to 200 billion won ($176.8 million) — over the last five years.
South Korean businesses’ red ink in China stems from Beijing’s methodical retaliations on Korean goods and services along with Chinese citizens’ anti-Korea sentiment fueled by the government in Beijing since the Thaad deployment. Lotte Mart has already suspended operations at most of its retail outlets in China. Lotte reportedly plans to sell half of its local marts and kick off a large-scale restructuring aimed at slashing local manpower by half because a 1 trillion won deficit is expected by year’s end.
Beijing Hyundai, a joint-venture between China’s BAIC Motor and Hyundai Motor, is also on shaky ground. It has been in business since 2002. Sales and profits plunged since March. After BAIC Motor stopped paying for automotive parts supplied by local contractors, Beijing Hyundai may also have to suspend operations in China.
Under such volatile circumstances, China’s state mouthpieces reported that BAIC Motor is considering the idea of ending the 50-50 joint venture. China’s retaliation against South Korea for its agreeing to deploy the missile shield makes the struggling Korean economy even worse. It is not the time for us to ignore this situation even if we are temporarily elated by the global performance of our semiconductor industry.
Chinese President Xi Jinping emphasizes the importance of China’s traditional values such as maintaining friendly relations with neighbors, treating them with sincerity, sharing mutual benefits and so on. Xi championed those principles as the basic direction of China’s foreign policy. Beijing also included the concept of “opening” and “co-sharing” in its ambitious social development plan that runs through 2030.
Unfortunately, however, we see the real face of China now. Xi professed to be a guardian of opening up and free trade at the World Economic Forum in Davos, Switzerland, last January. We wonder if what we see is really what he meant by opening up and being cooperative. A nation that is not ashamed of such a shameful gap between words and actions cannot be a global leader.
JoongAng Ilbo, Sept. 11