Reprisal against THADD Deployment?

China has made a variety pressures on South Korean companies, products and projects in China since the Korean government’s decision on THADD deployment.
China has made a variety pressures on South Korean companies, products and projects in China since the Korean government’s decision on THADD deployment.

 

The Chinese government launched an extensive investigation, including tax investigation and sanitary inspection, into the Lotte Group. This has added to China’s trade barriers, which have risen for years in various sectors ranging from steel and petrochemical to IT. At present, the Chinese government has 13 trade regulations in effect in relation to South Korea, the number being second only to those imposed on Indian and U.S. companies. Seven out of the 13 are on chemical products and the rest include one on steel products and one on electronics. 12 out of the 13 are anti-dumping tariffs, which directly affect exports.

The investigation of the Lotte Group has to do with THAAD deployment in South Korea. If this conflict continues, South Korean companies will lose their chance in the Chinese market, which accounts for one-fourth of South Korea’s exports.

China’s trade protectionism is showing no signs of subsiding. In each of 2014 and 2015, China imposed only a couple of anti-dumping tariffs on South Korean products. However, the Chinese government called sugar imported from South Korea into question in September this year, two months after the decision on the deployment of the missile defense system, and launched an anti-dumping investigation regarding polyacetal in October. In that very month, the Chinese government announced that it would limit the numbers of powdered formula products and manufacturers in the market. South Korean polysilicon manufacturers were subject to additional anti-dumping investigations last month, too.

The Chinese government is also planning to tighten its quality control regulations applied to cosmetics. In addition, it recently changed its electric vehicle battery production capacity regulations, targeting South Korean electric vehicle battery manufacturers such as LG Chem, Samsung SDI and SK Innovation.

Furthermore, experts are pointing out that more sanitary and phytosanitary measures and more technical trade barriers are likely to follow in China to cause a bunch of South Korea products failing to pass through Chinese customs. Last year, the number of such cases amounted to 101. Moreover, those in the shipping industry are saying that Hyundai Merchant Marine’s participation in the 2M shipping conference can be thwarted by the Chinese government opposed to the THAAD deployment.

 

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