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The Sino-Korean Trade War Must End

SEOUL – South Korea has decided to deploy a US missile-defense system, and China is furious. Chinese leaders worry that the Terminal High Altitude Area Defense (THAAD) system will undermine its security and disrupt the regional strategic balance, by monitoring flights and missile launches in Chinese territory. But, as long as North Korea poses such an acute threat on the Korean Peninsula, China’s opposition to it is pointless – and highly destructive.

As the United States and South Korea rush to deploy THAAD before the South’s snap presidential election on May 9, China is ramping up economic sanctions, in the hope of compelling the next president to reconsider. Already, South Korea’s tourism, consumer goods, and entertainment industries have been hit hard.

Chinese travel agencies have suspended the sale of group tours to South Korea. And China has temporarily closed the 55 discount stores owned by the Lotte Group – South Korea’s fifth-largest conglomerate and the supplier of the land for the THAAD system – for supposed safety violations. Chinese media have issued threats that sanctions could be extended to other South Korean companies, like Samsung and Hyundai.

China is eager to take advantage of its position as South Korea’s largest trading partner, accounting for nearly one-quarter of its external trade, and main source of foreign tourism. (Chinese tourists accounted for half the total number of foreign visitors to South Korea last year – more than eight million people.)