18:59 GMT +306 December 2019
Listen Live
    Containers are seen at the Yangshan Deep Water Port, part of the Shanghai Free Trade Zone, in Shanghai, China, February 13, 2017

    Seoul Braces for China's Economic Response to US Missile System in S Korea

    © REUTERS / Aly Song
    Asia & Pacific
    Get short URL
    11193
    Subscribe

    Seoul is seriously concerned that China may react negatively to the upcoming deployment of elements of the US Terminal High Altitude Area Defense (THAAD) system in South Korea, according to Sputnik Korea.

    Commenting on the forthcoming deployment of elements of the US Terminal High Altitude Area Defense (THAAD) system in South Korea, experts told Sputnik Korea that Seoul is already alarmed about China's retaliation against the move.

    In this context, Lee Wanghwi from Ajou University mentioned China's so-called Red Supply Chain, a new economic policy which he said poses a serious threat to South Korea, which currently delivers many components, semi-finished and intermediate products to China.

    "As soon as the question of Seoul's possible trade war with Beijing after the THAAD deployment arises, suggestions emerge to reduce the share of China, which now amounts to 25% of South Korea's foreign trade."

    "Quickly reducing the share of trade with China is very difficult, given that many companies are involved in the [mutual] supply chain," Wanghwi said.

    He added that first and foremost, the situation may affect Taiwan and Hong Kong, where the volume of trade with China is already falling; other countries to be economically damaged will include Australia, the Philippines, Japan, Canada, Korea and the United States.

    He was echoed by Professor Lee Hocheol of Incheon National University, who predicted that if China increases the pressure, there will be even more consequences, so one should "address this issue carefully and objectively."   

    "China is implementing the One Belt and One Road initiative, which stipulates fulfilling the Silk Road and Maritime Silk Road projects. By doing so China tries to boost its economic and political clout in Asia and unequivocally hints that the US should withdraw," Hocheol said.

    Gang Seonju from Korea National Diplomatic Academy said in turn that "China is not as open as the United States, and that Beijing may start creating "vertical production chains which rely on domestic demand."

    In this case, Korea will have to reduce its dependence on China quickly enough by reviewing international added value chains, according to Seonju.

    Earlier this month, the South Korean news agency Yonhap reported that Seoul is considering the possibility of filing for arbitration with the World Trade Organization due to China's unfair retaliation measures.

    South Korean authorities accuse Beijing of blocking the access of Korean entertainers to Chinese market, as well as imposing harsh import standards, compared to other countries.

    China's actions are believed to be triggered by a previous Seoul-Washington decision to deploy the THAAD system in South Korea's Seongju County.

    THAAD, which South Korea agreed in 2016 to be deployed on its territory by the end of 2017 with the stated aim of countering threats from North Korea, serves as one of the main irritants in Beijing-Seoul ties.

    China and Russia have repeatedly showed their objection to the deployment of THAAD, arguing that their real aim was to deter the strategic weapon systems not only in the Korean Peninsula's North, but primarily in China's hinterlands and Russia's Far East regions.   

    Never miss a story again — sign up to our Telegram channel and we'll keep you up to speed!                                                                             

    Related:

    China Should Cease Attempts to Undermine South Korea’s Defense Ability - McCain
    US Sets Date for THAAD Deployment in South Korea as China Protests
    Lotte Group Delays Acquisition of THAAD Deployment Site in South Korea
    Tags:
    missile system, consequences, dependence, deployment, production, trade, THAAD, China, South Korea
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik