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China Vs. the Koreas: Food’n’Nukes

Unpacking the THAAD-Lotte-North Korea-China controversy.

March 9, 2017

Unpacking the THAAD-Lotte-North Korea-China controversy.

A golf course and a major corporation that specializes in food products (two of its most popular brands are chocolate pie and gum) are not usually in the recipe for an increase in international tensions.

But the equation changes once you add three more components to the mix — an anti-missile system, China’s sense that the United States is trying to contain it and North Korea’s nuclear ambitions. In such a mix, a web of multi-layered suspicions can easily rise.

As China’s top political figures gathered for the annual National People’s Congress in the majestic Great Hall of the People, Premier Li Keqiang gave a stark warning on Sunday of “more complicated and graver situations” and “many uncertainties … both inside and outside China.”

He was referring, mainly, to the global economic situation. However, as if right on script, North Korea launched four ballistic missiles 1,000 km into the sea off its eastern coast on Monday. Three of them fell within Japan’s Exclusive Economic Zone.

Developing a nuclear-armed missile capable of hitting the U.S. mainland has long been an ambition of Pyongyang. These missiles were part of the development process. They were also in response to military drills that have just kicked off between Washington and Seoul. Pyongyang conveniently views such drills as a dress rehearsal for invasion.

Relations between Beijing and Pyongyang are cooling, ironically for lack of fuel. On February 19, Beijing halted imports of North Korean coal — a $1 billion annual harvest for North Korea’s budget — for the rest of the year.

Beijing dancing to the tune of the US?

To North Korea’s dismay, China is now fully compliant with the unprecedented UN sanctions it signed up to in March 2016. Pyongyang responded by accusing its increasingly reluctant, and from its point of view no longer fully reliable, sponsors in Beijing of “dancing to the tune of the U.S.”

The assassination of Kim Jong-nam — elder half-brother to Kim Jong Un — by VX nerve agent in Kuala Lumpur International Airport on February 13 has clearly caused consternation in Beijing. Kim lived mostly in the semiautonomous Chinese territory of Macau and was, ostensibly, under China’s protection.

What about South Korea?

South Korea must feel encouraged by greater Chinese concern about Korea’s unruly North. It has long been concerned by what it understandably considers North Korean belligerence.

Exploiting the moment, the South Korean government had little hesitation in agreeing to host a battery of the U.S. Terminal High Altitude Area Defense (THAAD) antimissile defense system. Such a system would be expected to defend the country against direct short-range missile attacks from the north.

Beijing is not amused

Not surprisingly, Beijing views the agreement to deploy the system as South Korea acquiescing to what it claims is an American strategy of containment. Beijing says the system’s radar allows it to “peek” into China, something Beijing wants to avoid with the South China Sea becoming ever more contentious.

Enter Lotte, the South Korean food company. China now has the conglomerate in its crosshairs. Why? Because Lotte has offered land, on a golf course it owns south of Seoul, to be used for THAAD.

Many in China are now calling for a boycott of Lotte’s five department stores and around 100 supermarkets. This is not peanuts. About a third of its revenue comes from the Chinese market.

(As it happens, Lotte also has stores in the United States, primarily in the Washington, D.C. area, but they represent a much smaller operation than its China business – with only about a dozen stores.)

China is striking back

And Chinese authorities are not standing pat. Four Lotte stores have already been closed in China after “inspections.” South Korea travel packages, which were growing in popularity in mainland China, have been withdrawn by Chinese travel firms.

Eight million Chinese tourists visited South Korea in 2016, up a third on the previous year. And exports from South Korea to China account for a quarter of its exports.

South Korea stands firm

However, Pyongyang’s continued missile tests strengthen South Korea’s case for the THAAD deployment.

Facing this conundrum, Beijing says that the six-party denuclearization talks — comprising North and South Korea, Japan, Russia, China and the United States – (which ran from 2003 to 2009 before being axed by Kim Jong-il, former leader and father to Kim Jong-un and Kim Jong-nam) should be restarted.

But there is as little appetite for this in either South or North Korea as there seems to be for Lotte products among Chinese officials.


A South Korean supermarket and golf chain finds itself tangling in a nuclear power struggle.

China is exacting petty revenge on the South Korean conglomerate Lotte for its decision to host US defense systems.

Shocking North Korea, China has cut off key purchases of North Korean coal, adhering to sanctions.