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Korea Inc. can’t fight China alone

Mar 11,2017
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“Don’t mention the brand’s name,” a Korean company official said when I asked how it planned to deal with China’s trade retaliation over Thaad. “Once we admit that the company has suffered certain damage, it could lead to greater damage. I heard Chinese online users and media are monitoring Korean media.”

This company is not the only one. Lotte is under heavy fire though it hasn’t openly denounced it. While Lotte has been branded an accomplice for providing the Thaad site, it maintains a poker face as if nothing happened. Out of Lotte Mart’s 99 locations in China, 55 have been suspended from operation.

While silence is the choice response in Korea, things are more urgent in China. An employee of a company in Weihai reported, “Hundreds of people were demonstrating to boycott Lotte Department Store. While the government is not directly organizing the demonstration, it is practically letting protests happen as a way to pressure Lotte.”

The latest development suggests Thaad retaliation won’t subside easily. As deployment progresses, China may intensify its retaliation. That would mean greater damage for Korean tourism and Korean companies operating in China. As the loss is estimated to be in the trillions of won, companies are watching the situation with nervousness.

The Korean government seems to have littler understanding of this desperation. On the same day, Finance Minister Yoo Il-ho said in a meeting with other ministers, “It is hard to conclude that the latest economic measures by China are retaliation associated with Thaad deployment. We will watch the situation closely and work to minimize damage on Korean companies and the people. We will enhance economic and diplomatic efforts with China.”

Industries are already disappointed by the comment. While they want to believe that it was a “white lie” not to encourage a sense of crisis, companies are frustrated by the government’s response. Upon hearing Yoo’s remark, a businessman said, “If there is a reason that cannot be openly mentioned, he should have simply said ‘to make diplomatic efforts’ without denying retaliation.”

It is correct that Korea needs a fundamental solution to change its excessive dependency on China and diversify its markets. However, it is not possible overnight.

At this desperate juncture, the companies can only rely on the government. In addition to diplomatic efforts, they hope the government can give them conviction and belief that it is working for Korean companies.

JoongAng Ilbo, March 9, Page 29


*The author is an industrial news reporter for the JoongAng Ilbo.

JANG JU-YOUNG