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March 21, 2017

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China rejects South Korea claims of THAAD deployment ‘retaliation’

Source: Agencies | March 21, 2017, Tuesday | Print Edition

CHINA supports normal business and other exchanges with South Korea, it said yesterday in response to Seoul’s complaint to the World Trade Organization about what it claims China’s retaliation against South Korean companies over the deployment of a US anti-missile defense system in the country.

“We have notified the WTO that China may be in violation of some trade agreements,” Trade Minister Joo Hyung-hwan told parliament in response to questions about China’s reaction to the deployment of the Terminal High Altitude Area Defense system in South Korea.

Joo said the issue was raised with the WTO’s Council for Trade in Services last Friday after China imposed “restrictions” on South Korean companies in the tourism and distribution sectors.

A trade ministry official, who asked not to be identified, said the complaint could not be categorized as legal action but was rather a request for the WTO to look into whether China was upholding agreements fairly.

In Beijing, foreign ministry spokeswoman Hua Chunying did not comment directly on South Korea’s complaint.

“We support normal business and other exchanges between China and South Korea,” the spokeswoman told a daily news briefing yesterday. “But everyone knows this needs a corresponding basis in public opinion.”

South Korea and the United States say the purpose of the THAAD system is to guard against missile launches from North Korea but China has been infuriated by its deployment, saying that its powerful radar could penetrate into its territory.

China is South Korea’s largest trading partner and the dispute over THAAD has resulted in a sharp decline in Chinese tourists in South Korea’s shopping districts.

Chinese authorities have also closed nearly two dozen retail stores of South Korea’s Lotte Group, citing safety concerns.

The South Korean government has offered cheap loans and extended deadlines on existing debt to help businesses that have been affected and has pushed to diversify trade markets.

Some South Korean lawmakers ramped up criticism of what they say has been the government’s lack of an aggressive response to China’s actions, which they claim also include a freeze on South Korean television dramas, as well as music and product boycotts.

Efforts to hold direct discussions between the finance ministers of China and South Korea at a G20 meeting in Germany at the weekend fell through after Beijing declined Seoul’s request to meet, citing scheduling reasons.

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