Ghost stores, lost billions as Korea Inc’s China woes grow
SEOUL/JIAXING, CHINA: On a faded notice pasted to the padlocked doors of the Lotte Mart superstore in China’s Jiaxing, a date can still be read: March 6, 2017 – when the store was ordered to ‘temporarily’ close over alleged fire safety issues.
The shuttered entrance and flapping notices are a blunt reminder of how South Korean businesses have become unwitting victims in a year-long diplomatic stand-off between Beijing and Seoul.
Last September, Chinese President Xi Jinping warned his South Korean counterpart that bilateral ties would suffer if Seoul did not properly handle China’s opposition to the planned deployment of a US anti-missile defence system in South Korea.
Now – with the system’s installation mostly complete amid growing threats from North Korea – the fallout is evident in both the shuttered Chinese stores of Lotte and the empty Seoul shopping districts once jammed with Chinese tourists.
The Jiaxing outlet, southwest of Shanghai – along with around 90 other Lotte Mart stores in China – remains shut over its supposed fire safety violations.
No inspectors have turned up despite what Lotte says were repeated entreaties to rectify the problems.
A skeleton staff say they are being paid minimum required wages, but Lotte is now considering selling up.
Upset over Seoul’s decision to deploy the Terminal High Altitude Area Defense (THAAD) system, tour operators say China has quietly banned groups travelling to South Korea, once one of the most popular destinations for Chinese tourists.
Cruises have erased Korean ports from their trips and some flights have been cut.
“Things have never been worse since formal diplomatic relations were established between the two in 1992,” said Han Jae-jin, an economist at the Hyundai Research Institute.
Seoul and Washington say THAAD is purely a deterrent to nuclear-armed North Korea, but Beijing worries the system’s radar can penetrate its territory and will upset the regional security balance.
Publicly, Beijing has maintained it supports ‘normal business’ and other exchanges with South Korea has not commented on the situation with Lotte or tour groups.
Near Dongdaemun in Seoul, a major shopping district, an outdoor wear popup store had signs reading “Thaad retaliation shock! Going out of business sale!”.
Dozens of similar signs were seen across the 24-hour shopping precinct. Cho Kyung-suk, who has been selling women’s bags for 15 years in Dongdaemun, closed one of his three stores in February.