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Beijing encourages boycott of Lotte over Thaad

Mar 02,2017
Two days after Lotte Group made its final decision to swap land that will be used for the American Terminal High Altitude Area Defense (Thaad) system, boycotts of the company began in China along with targeted cyberattacks.

JD.com, China’s second largest e-commerce site, shut down a section dedicated to Lotte Mart products on Tuesday. In mid-January, Lotte.com, an e-commerce arm of the Korean retail giant, voluntarily closed its section on Tmall, an e-commerce site owned by Alibaba, citing sluggish sales.

On Tuesday, Lotte Group’s Chinese website abruptly halted operations and hadn’t recovered by Wednesday. A source at Lotte Group’s Chinese Office attributed the problem to an external attack via computer virus. The source of the attack had not been identified.

Lotte Duty Free’s account on Weibo, a Chinese version of Twitter, was flooding with over 20,000 comments demanding Lotte “Leave China.” A posting on “What’s on Weibo” describing Lotte’s Monday approval to swap the land for the Thaad deployment was viewed over 9 million times.

Major media outlets in China predicted a national boycott after the group’s board of directors gathered Monday to approve the transfer of a golf course in Seongju to the government to be used as the home for Thaad.

The state-run Xinhua News Agency reported that Chinese people would likely “share a stance against anyone who damages the security interests of their country.” The Global Times, also government-run, wrote: “Lotte Group’s development in the Chinese market should come to an end.”

Chinese Foreign Ministry spokesman Geng Shuang said at a media briefing Tuesday, “The success of foreign companies who do business in our country ultimately depends on China’s market and consumers.”

A Lotte Group spokesman said that the company had no further comment on the issue, adding, “The matter is already out of our hands.”

Lotte has suffered from unofficial sanctions from Chinese authorities: In November, over 150 of its factories, storage facilities and stores were hit with tax audits and safety checks.

Construction of the Lotte World Town in Shenyang was halted by Chinese authorities in December.

The 3-trillion won project includes a mall, hotel and theme park at a single site.

In China, Lotte runs five department stores, 99 Lotte Marts and 16 super markets. A total of 24 Lotte subsidiaries are doing business in China. Lotte is not the only Korean company anxious about a backlash in China.

On Wednesday, the Global Times pointed out that Samsung and Hyundai Motor have a lot of business in China, adding that Korean retailers other than Lotte Group “should be sanctioned by Chinese buyers.”

BY SONG KYOUNG-SON, JIN EUN-SOO [song.kyoungson@joongang.co.kr]