Chinese visitors to South Korea decline amid THAAD tensions

The number of Chinese tourists visiting South Korea tumbled this year amid a controversy over the US Terminal High Altitude Area Defense (THAAD) deployment in South Korea, hitting the country’s tourism industry.

According to the justice ministry’s immigration data cited last week by the Yonhap news agency, the number of Chinese travelers to South Korea stood at 3,022,590 from January to August, only about half the level of a year earlier.

During the period, tourists from Japan, the US, Thailand and Russia increased.

The sharp fall in Chinese tourists, who account for the largest portion of foreign visitors, led to a double-digit decline in overall tourist arrivals in South Korea for the first eight months.

Relations between South Korea and China, which were once depicted as better than ever in history, were strained after South Korea and the US announced the decision in July last year to deploy one THAAD battery in southeast South Korea.

China has strongly opposed the US missile shield installation, saying that its radar peers deeply into Chinese territory, damaging the security interests of China and boosting an arms race in the region.

South Korea has said the system is needed to defend against possible North Korean nuclear and missile attacks, although the THAAD system has little capability to intercept North Korean missiles targeting South Korea’s territory.

According to Hyundai Research Institute estimates in May, there may be an 8.5 trillion won ($7.5 billion) loss to South Korea’s economy in 2017 due to the controversy over the THAAD issue.

That would be about 0.5 percent of South Korea’s nominal GDP this year, including 7.1 trillion won from the tourism industry and 1.4 trillion won in exports.

Local duty-free shops, which had been crowded with Chinese tourists before the THAAD controversy, fell silent this year even during the Chuseok holiday, which coincided with the China’s Mid-Autumn Festival.

Lotte Duty Free saw its sales to Chinese tourists fall 25 percent year-on-year during the holiday.

According to Yonhap, construction of a duty-free shop complex at a major port of South Korea’s southern resort island of Jeju was completed in July, but it had yet to be opened amid the declined Chinese travelers.

No Chinese cruise ships have visited the port since mid-March. About 10 billion won was spent building the complex, according to the report.