In an article titled “Nationalism Unleashed” ran by The Economist, ongoing woeful Chinese nationalism movement for Sino-Korean relations was highlighted. South Korea’s swift action to deploy the US military’s THAAD missiles has caused a crack in the relations.
As countermeasure, Beijing elected to impose economic sanctions against Korea in an indirect manner by reining in media, provoking its citizens as pawns by indoctrinating them with nationalism, or dare I say jingoism. With the Chinese media proclaiming South Korea’s THAAD deployment a detriment to the country’s security, its people have responded by roaring against Korea and everything that is related, be it tangible or not: the people, entertainment, goods etc.
The anger of Chinese was channeled towards Lotte, a Korean chaebol that swapped its land with that of the Korean government’s, providing the site for Americans to build an anti-missile system in the country. No coincidence involved, Lotte has suffered the most from the Chinese public uproar so far, with 67 of the 99 marts in China were suspended of business for a month-span by Chinese government while the remaining stores suffered from the massive boycott for Korean goods. Due to such circumstance, 20 of the 22 stores available for operations have closed on their own terms, per a Korean new outlet report. The same report estimated the loss inflicted from the close of business to amount around 100 billion Korean won (100 million US dollars).
Why is China upset?
It is a tough question to answer on surface; hence we need to dig deeper for answers. To clarify beforehand, THAAD is purely a defensive system that doesn’t carry warheads, rather relying on “interceptors” to destroy incoming missiles. The system deployed to Korea will only work on missiles in their terminal phase—implying those subjected to system are limited to those launched from North Korea headed south of the peninsula. The system rules out those that are still in ascending phase; therefore missiles launched by China will not be of subject unless headed towards South Korea.
As many experts argue, the sophisticated radar capabilities included in the system is what unnerves Beijing. These radars could be used to track China’s own missile systems, potentially giving the US a major advantage in any future conflict with the world’s second-largest economy, as per a Washington Post article. Along the line, a strengthened alliance among the US, South Korea and Japan comes as a threat to China.
(For more, please click here for detailed article published by the Washington Post regarding the matter)
Please see below images to grasp the matter in detail.
This, too, shall pass away
Personally, this seems like a déjà-vu. During my undergraduate studies in China four years prior, I witnessed the nationalism-prompted boycott on everything related to Japan amid escalating tensions over Diaoyudao or Senkaku Island. When visiting a southern province in Changsha, home of Mao Zhe-Dong, there were signs at stores that banned Japanese from entering their property. In some cities, the hatred towards Japan reached new heights as people destroyed Japanese cars on street, regardless of the owners’ nationality.
The matter took China’s animosity towards Japan to a peak level, given the existing profound acrimony stemming from early 20th century militaristic aggression. The relation seemingly crossed the line far beyond repairmen, but is now normalized. Then what about the public anger towards Japanese and Japanese goods? According to data released by Japan National Tourism Organization funded by the Japanese government, Chinese travelers to Japan have increased sharply in the past three years to nearly account 26.5 percent of all travelers to Japan in 2016, underpinned by depreciating Japanese Yen and Tokyo’s efforts to attract foreign tourists.
When flipping the history book further, we come to realize that an economic retaliation is nothing of new. Napoleon’s France implemented a Continental Blockade (also known as Continental System) against Britain in the early 19th century.
(For details, please refer to this Wikipedia link)
To take note from history, the blockade lasted nearly six years from 1806 to 1812; seriously damaging Britain’s trading capacity, yet factored as the opportunity to expand trading horizon. Britain, of course, had a mighty naval fleet that destroyed the famous Spanish Armada which contributed tremendously in setting up a worldwide network without much distraction, laying down the foundation for formation of what we now know as the British Empire.
The world has become more compact in terms of accessibility of markets via technological advancements, and unlike two centuries prior, all markets are interconnected and penetrated to a degree. Thus cultivating new markets is a difficult task for Korean companies, which already have constructed networks based upon extensive market researches. However, Korean companies could use this opportunity to put more emphasis in the Southeast Asian markets, which are entering the high growth stages and still somewhat underpenetrated, in part to reduce the trade dependency on China—which accounts nearly a quarter of all Korean trades.
But the above scenario is more of a secular transition, a change for the long-haul. In the interim, the Korean economy will suffer immensely; hence an early end to the “unofficial” economic sanction on Korea is the optimal option for the country at risk of deflation. Thankfully, there are signs of public opinion swinging in China. A survey conducted by market research firm Nice R&C shows that of the 2,100 Chinese surveyed responded that Beijing’s decision to suspend Lotte Mart’s business in China was a ‘very poor policy’(37.2%) and a ‘poor policy’(19.0%), respectively. There is room for the blind nationalism to backfire, given the popularity of Korean pop culture and cosmetics in China. Will Korea’s soft power guide the country out of an economic abyss structured by China? We’ll have to wait-and-see.
History is on Korea’s side; the economic sanction imposed by China on Korea will likely to be lifted sooner rather than later, or highly doubtful of running for numerous years. The circumstance shall indeed pass by, and perhaps even become a blessing in disguise as it did for Japan and Great Britain, respectively. To follow the footsteps of the aforementioned cases, Korea should look to diversify its trade partner portfolio and strengthen relationships with others, rather than sitting idly by, waiting for the ban to be withdrawn, which is the worst possible—but most likely—action that will take place in the near future.
Jungmin/Paul's Mind 