Why South Korean companies, entertainers are getting cold shoulder in China

Ever since Seoul agreed last year to host a US missile defense system, South Korean pop stars, musicians and companies have felt a distinct chill in China.

This week, China took aim at Lotte, a South Korean conglomerate that owns the golf course on which the THAAD system will be located. China sees THAAD as a severe threat to its security interests, but South Korea and US see it a key to defending against potential threats from North Korea.

China’s official news agency, Xinhua, in a fiercely worded commentary Sunday, said the Lotte board would “hurt the Chinese people” and the “consequences could be severe” if it goes ahead and finalizes a land-swap deal.

“Lotte stands to lose Chinese customers and the Chinese market. That would be a very large slice out of their business pie,” said the commentary, which did not carry a byline.

Lotte, which has also faced a tax investigation in China, is not alone in facing Beijing’s wrath. South Korea analysts argue that Beijing is using economic retaliation against South Korea to send the country a political message.

“Trade is being used as a punishment to any country that has territorial and other issues with China,” Ingyu Oh, a professor of sociology at Korea University, told CNN.

“China’s message to South Korea is not to align with the US military to a degree that can threaten the security of China,” added Oh.

Performances canceled

In January, two South Korean classical artists, soprano Sumi Jo and pianist Kwun-woo Paik, were denied performance visas. No reason was given.

Sumi Jo said on her Twitter account that her China tour had suddenly been canceled after two years of preparations. It had been China that had initially invited her to perform.

“It’s such a shame that conflict between two countries interferes with the fields of pure art and culture,” said Jo in a veiled tweet.

In December, China banned imports of 19 Korean cosmetics and in August, Chinese state media reported that restrictions would be placed on Korean TV shows.

“It seems there is no end to China’s mean-spirited bullying of South Korea,” an editorial in The Korea Herald said on February 12.

Official response

A South Korea government spokesman told CNN that it was paying attention to “the list of measures recently taking place in China.”

“[We] plan to manage the relationship of the two countries while keeping the principles regarding securities issues and limiting the effect it has on South Korea-China relations,” the spokesman told CNN.

South Korea’s Foreign Ministry said this month that the cosmetics had been banned because the requisite registration documents hadn’t been submitted.

Beijing denies placing economic sanctions on South Korea, while continuing to assert its opposition to THAAD.

Chinese Foreign Ministry spokesman Lu Kang, told CNN February 7 that he’d never heard of China “imposing any restriction on the Republic of Korea.”

And in January, Chinese Foreign Ministry spokeswoman Hua Chunying said she wasn’t aware of the canceled performances by Sumi Jo.

But Christopher Green, a researcher at Leiden University in the Netherlands, says actions speak louder than words. He says there is “zero likelihood that the Chinese actions are not politically motivated.”

“The Chinese actions are part of the endless struggle for influence and control in East Asia. From the Korean side, the issue is experienced as localized pressure on its economy in response to the THAAD decision,” said Green.

Trade relations at risk?

South Korea is China’s third-largest trading partner and China is South Korea’s largest, with the latter exporting up to $142 billion per year to the country, according to a report released by the Massachusetts Institute of Technology.

Tourism between the two countries has also boomed, with South Korea seeing a 27% increase of tourists from China (3.8 million) in 2016, according to non-governmental research institute, the Union of International Associations – largely thanks to the popularity of hallyu – Korean pop culture – which has been a hit among young people in China and the rest of Asia since the 1990s.

THAAD’s planned deployment puts such trade and cultural relations at risk – Oh says China’s hallyu market is worth just under $1 billion.

Exporters of Korean dramas, pop music and shows, said Oh, were now trying to “withdraw from China and recommit themselves to old and new markets.”

However, the popularity of South Korean products on the ground in China doesn’t appear to be diminishing – at least for now.

“I know THAAD, but I wouldn’t boycott Korean cosmetics for it. I bought the products in China so my consumption should help domestic economy in China,” Freya Fan, who buys Korean “Innisfree” products, told CNN in Beijing.

CNN’s Steven Jiang, Serentie Wang and Katie Hunt contributed to this report