China promises to end economic restrictionsA senior Chinese official’s promise last week to lift its economic restrictions on Korean firms over a missile defense dispute has raised cautious hopes among local retail, tourism and other businesses.
During a meeting with President Moon Jae-in in Seoul on Friday, Chinese State Councilor Yang Jiechi said there will be “tangible results in the near future,” when Moon requested China terminate what is seen as retaliation for the deployment of an advanced U.S. missile defense system, known as Thaad, in Korea.
He visited Seoul as President Xi Jinping’s special envoy to explain the results of Xi’s talks with North Korean leader Kim Jong-un.
Korea’s retail, tourism, entertainment and other businesses suffered losses because of China’s restrictive measures, including the prohibition of its people’s travel packages, import and business suspensions and bans of K-pop stars.
Lotte Group, which provided the land its golf course was on to house the Thaad system, was hit hardest. Its supermarket chain in China closed after customer boycotts and major construction projects were put on hold.
The business group is estimated to have incurred more than 2 trillion won ($1.88 billion) in business losses.
“The results of government efforts to persuade China seem to finally be showing,” a Lotte official said. “We will need to wait and see, but it is true that our expectations are high.”
Korea’s government and business leaders have used all available opportunities to convince China that Thaad was not intended to threaten its security in any way, and that the two countries need to forge forward-looking relations. Such opportunities in the past had not succeeded, warranting caution this time as well.
“It is something to welcome, but we do need to wait to see if the retaliations will actually end,” said an official at Lotte Duty Free, the country’s largest in the industry. “Given the precedents, there is a chance that the Chinese government will attach different conditions. It’s difficult to become optimistic prematurely.”
Even if Beijing lifts its punitive measures, it will take at least three to six months for businesses to return to the pre-Thaad level, the official said.
The accommodations industry, also took a cautious approach, pointing out that the Thaad issue involves not just Korea and China but other countries.