A Terminal High Altitude Area Defense (THAAD) interceptor is launched during a successful intercept test. Photo: US Department of Defense
Lotte Group's board of directors is scheduled to approve a land swap deal with the South Korean government at the end of February to facilitate the deployment of the Terminal High Altitude Area Defense (THAAD) anti-missile system, shrugging off Beijing's strong objection, reported the Global Times over the weekend, citing unnamed sources.
Although having suffered business losses in China, the South Korean conglomerate insisted to cooperate with its government. Since the news about the land swap deal broke out late last year, Lotte has been suffering from the suspension of the construction of its project in the northeastern Chinese city of Shenyang, the closing of its flagship store on China's largest online marketplace Taobao, and the withdrawal of its three supermarkets from the country, in a sign that the South Korean company has become a target of boycott by the Chinese.
Analysts say that if Lotte does not change its stand over the THAAD deployment, it will lose more from its economic retaliations with Beijing.
In a blunt editorial published over the weekend, the Xinhua News Agency warned Lotte against the decision, which it described as "a threat to the regional security and stability".
The Xinhua article said that the deployment of the THAAD system in South Korea will play no constructive role in easing the tensions on the Korean Peninsula and poses a severe threat to China's security interests. "Lotte will hurt the Chinese people and the consequences could be severe," the article said.
Following Xinhua, the Global Times, a nationalist-leaning newspaper, ran a commentary on Tuesday, in which it said that Lotte's reputation and business prospects in China have been badly damaged because of its involvement in the THAAD installment. "The Chinese society is also determined to make Lotte pay the price for its support for the THAAD development. Such a company that violates China's interests should move out of China," the Global times article said.
Currently, Lotte has more than 150 branches in the retail sector in China, with its business scope involving various industries ranging from food, retail, tourism, construction to finance and service.
Nearly 70 percent of Lotte's total sales at its duty-free shops in the first quarter last year came from Chinese consumers, the company's data showed.
When South Korean President Park Geun-hye agreed to place the THAAD system in her country last year, China's media watchdog, the State Administration of Press, Publication, Radio, Film and Television, immediately issued a sweeping ban on South Korean stars' entertainment activities in the country. It was partly seen as a reaction of the Chinese government to its neighbor's move, which was supported by most Chinese nationals.
In a recent meeting with his South Korean counterpart, Chinese Foreign Minister Wang Yi showed his understanding about Seoul's concerns over the potential security risks from provocative North Korea, but he stressed that Beijing's worry over the deployment of the THHAD system in its doorstep should also be respected.