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S. Korea firms face China's tighter rules over THAAD

All News 11:04 March 07, 2017

SEOUL, March 7 (Yonhap) -- South Korean companies are increasingly faced with China's unreasonable and tighter regulations after Seoul finalized the site for a high-tech U.S. missile defense system, sources said Tuesday.

Late last month, South Korea finalized a deal with Lotte Group to station a Terminal High Altitude Area Defense (THAAD) battery on a Lotte golf course in the southeastern county of Seongju. Lotte agreed to receive a military-owned land plot near Seoul in return.

The deal came seven months after Seoul and Washington agreed to install the anti-missile battery to better counter missile threats from North Korea. China has slammed the deployment of the system, which comes with a high-powered radar, insisting America will use the device to spy on its military.

According to the sources, South Korean food manufacturers and cosmetics makers are taking the brunt of China's "retaliatory" measures.

"Chinese authorities are recently toughening customs clearance procedures for South Korean food products," an industry insider said. "It is common to take a sample survey, but these days, Chinese customs officials inspect all products, resulting in delayed customs clearance."

Makers of fresh foods or dairy products are said to suffer huge financial damage if customs clearance is delayed for several days because of their short shelf life.

This undated file photo shows a payloader crushing goods in front of a Lotte Mart outlet in China. (Yonhap)

An official from a South Korean cosmetics company voiced a similar view.

"Chinese government agencies have become stricter in handling import documents following the THAAD row. It used to take about three months to pass China's sanitary inspection, but the period has become longer," the official said.

On top of tighter regulatory measures, anti-Korean sentiment is growing gradually in China, South Korea's largest export market.

Recently, a couple of Chinese customers visited a famous South Korean cosmetics maker's store in China and shouted at local employees in a show of discontent over the planned THAAD deployment.

Chinese have also posted on social network services clips of locals venting anti-Korean sentiment, including footage of a protest calling for a boycott in front of a Lotte outlet.

Lotte Mart, a discount store arm of Lotte Group, has been hit the hardest among South Korean companies so far. As of late Monday, 23 Lotte Mart stores in China were put under business suspension for at least a month due to a breach of fire regulations. That accounts for over one-fourth of its 99 Lotte Mart shops currently running in the world's second-largest economy.

China is South Korea's largest trade partner. Last year, South Korea's exports to the world's second-largest economy reached US$124.43 billion, with its imports coming to $86.98 billion.

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