Chinese capital flowing out of S. Korea's stock market amid THAAD row

SEOUL, Jan. 4 (Yonhap) -- Chinese investors withdrew money from South Korea's stock market on a massive scale last year amid standoffs between the two sides over a U.S. missile defense system, data showed Wednesday.

They sold a net 1.5 trillion won (US$1.2 billion) worth of stocks here in the first 11 months of 2016, according to the Financial Supervisory Service (FSS).

China's net buying of South Korean shares peaked at 2.2 trillion won in 2013 and declined to 2 trillion won in 2014 and 136 billion won in 2015.

The trend comes as concern grows about Beijing's economic retaliation against Seoul for its decision to allow the U.S. military to deploy a THAAD missile defense battery on its soil. South Korea says the missile shield is necessary to counter North Korea's missile threats, but China views it as aimed more at increasing U.S. military influence in the region.

The diplomatic conflict between South Korea and China has intensified since Seoul's announcement of a specific site for the THAAD battery in July last year.

Chinese investors net-sold 177 billion won worth of shares here in August, followed by the net-selling of stocks worth 168 billion won in September, 206 billion won in October and 129 billion won in November.

It led to a sharp drop in the value of local stocks owned by China.
The amount fell to 8.6 trillion won as of end-November from 9.5 trillion won at the end of 2014 and 9.3 trillion won a year earlier.

lcd@yna.co.kr
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