War of the walletby Yuan Ren / June 21, 2017 / Leave a comment
Published in July 2017 issue of Prospect Magazine
“Chinese tourists are the [country’s] army,” one commentator on a television talk show recently quipped—and he wasn’t far wrong. The discussion was about how South Korea had fallen out of favour with Chinese travellers. Last year, it was the top international destination for the week-long May holidays; 12 months on, it had slid to tenth place.
The big plunge is because of South Korea’s embrace of THAAD (Terminal High Altitude Area Defence). Developed by the United States, it is a land-based system of rocket launchers mounted on trucks, which tracks and intercepts short- and medium-range missiles—like those Kim Jong-un has been testing in North Korea. THAAD’s radar detects an incoming threat and launches its own missile to destroy it high in the sky. The warhead-free projectile uses the force of its energy to destroy its target.
During a test on 29th May, the North Koreans fired a rocket into the Sea of Japan, an area active with fishing boats and cargo. So the nerves in the South Korean capital, Seoul, are natural enough. And if Kim Jong-un manages to develop long-range missiles, even the US could be at risk.
In September, the US did a deal to deploy THAAD in South Korea, with—it says—the sole purpose of defending the country from its northern neighbour. China, however, looks at its backyard and sees a direct impingement on its security. It claims, too, that the system allows the US to spy on China’s weapons programme. When the launchers began arriving in March, Beijing summoned its civilian army—the new middle class—to war. Consumers must become “the main force in teaching Seoul a lesson,” said the state-owned Global Times, adding “we’d better make it hurt.”
China is South Korea’s largest trading partner, so it can certainly hurt the country’s economy. At the same time as calling for a public boycott, the Chinese tourism ministry ordered travel companies in Beijing to stop selling group tours, later extending that ban to all of China. The Korea Economic Research Institute predicts that China’s actions will cost South Korea 8.5 trillion won (US $7.6bn) in 2017.