Beijing Threatens South Korean Corporations in Response to THAAD Deployment
In the last week of December, Chen Hai, Deputy Director-General of the Department of Asian Affairs in China’s Foreign Ministry, met with a number of South Korean business leaders to tell them that their operations in China could suffer as a result of Seoul’s decision to deploy the U.S. Terminal High Altitude Area Defense (THAAD) missile shield in South Korea. Mr. Chen met with a number of top Korean corporations, reportedly including Samsung and Lotte Group. Although he did not even meet with South Korean Foreign Ministry officials during that visit, he did meet with a number of leaders in the South Korean political opposition.
These Chinese threats issued to South Korean business leaders are an indication of China’s apparent willingness to use economic leverage as a means to pressure other countries over key national security and military-related issues. The Lotte Group has already experienced Chinese pressure, having received a number of regulatory probes by Beijing since it sold land that is to be used as a THAAD base to the South Korean government in November 2016.
This is not the first time that market access has been threatened or held back by Beijing, but it nevertheless demonstrates what types of issues China perceives as warranting tapping into this set of options. Recently, for example, China also threatened Singapore economically for perceived offenses with regard to the country’s policy on Taiwan, the South China Sea and military relations with the United States. This episode is a reminder of the utility in understanding how and where China is developing economic leverage and what the implications of such leverage might be in the future.