China Trying To Crush South Korea's Economy

Beijing has armed North Korea and is now trying to prevent nations from defending themselves from the resulting threat.
By Gordon G. Chang 

Executives of South Korea’s Lotte Group, after a meeting Sunday, asked Seoul for “active help.”
The retail giant’s business has been under pressure in China this year as it first considered and then approved a swap of parcels with the South Korean Ministry of Defense. 

The Ministry plans to use the acquired land, a golf course south of Seoul, for the first battery of the Terminal High Altitude Area Defense system, which is designed to knock down missiles.
Beijing, enraged at the defiance of “a small country,” has gone to great lengths to prevent the installation of the system.
And the Trump administration should go to great lengths to protect the American homeland. 

The security of the U.S. is at stake, so Washington should support its South Korean ally by imposing stiff sanctions on China.
The Pentagon wants to put THAAD, as the Lockheed Martin-built system is called, in South Korea to intercept North Korean missiles.
China has supplied crucial equipment and technologies to Pyongyang’s ballistic missile program. 

For instance, an enterprise associated with the People’s Liberation Army transferred transporter-erector-launchers for the North’s KN-08, making that intercontinental missile particularly dangerous to the U.S. 

Moreover, there are indications that the missiles Pyongyang tested August 24 and February 12 are variants of China’s submarine-launched JL-1 ballistic missile.
In addition to military technology and equipment, China has, over the course of decades, provided the North Korean regime with lifelines of diplomatic and economic support. 

Therefore, Beijing has armed North Korea and is now trying to prevent nations from defending themselves from the resulting threat.
To prevent deployment of THAAD in South Korea, Beijing has threatening to cut diplomatic relations with Seoul. 

Furthermore, it is trying to crush the South’s economy, barring its K-pop groups from performing in China, ending charter flights to the South, and banning the import of South Korean cosmetics. 

Daily Chinese state media tirades target Seoul.
And China’s officials have gone after Lotte, the South’s fifth largest chaebol.
Lotte has been targeted two ways. 

Of particular concern to the retail company is Beijing’s shutting down tour groups to South Korea. Friday, the Korea Tourism Organization charged that the China National Tourism Administration issued oral instructions to tour operators to stop the sale of packages to South Korea starting March 15.
Moreover, Lotte’s operations in China have been the subject of unrelenting attacks. 

The official Xinhua News Agency said the group was “acting as the paws of a tiger.” 

 “Showing Lotte the door will be an effective warning to all the other foreign forces that jeopardize China’s national interests,” the Global Times stated in an editorial.
Lotte, in recent months, has had more than its share of troubles in China, where it operates 80 supermarkets and more than 70 other outlets and employs about 20,000.
The Chinese government started softly with minor harassment, like audits.
Now China has turned up the heat. 

Lotte, for instance, has been hit with fines across the country, including Beijing.
Moreover, Chinese authorities have closed four Lotte Mart locations in the city of Dandong for a month for fire safety violations. 

After another fire inspection, authorities stopped construction on a Lotte project in Shenyang.
Lotte was recently removed from a JD.com platform, and Lotte’s Chinese site hit was hit by hackers last week. 

Chinese companies in the last few days said they would boycott the chaebol.
And there have been, with the blessing of authorities, protests against Lotte in several cities. 

“This is good old anti-foreign violence nineteenth-century style,” Arthur Waldron, the noted University of Pennsylvania historian, wrote to me and others on Saturday.
Beijing has, over the course of months, upped the pressure against Lotte and other South Korean businesses, but it is not clear how much further it is willing to go. 

As a practical matter, officials are unlikely to block components Chinese manufacturers need. “Economists say the THAAD-related backlash is not expected to significantly harm exports to China in the short term as a bulk of the shipments are intermediate goods, which China uses to manufacture finished products and ships to other countries,” writes the South China Morning Post in connection with the Lotte dispute.
In fact, South Korea’s exports to China, driven by sales of semiconductors and display panels, hit a six-year high last month.
Nonetheless, China’s attempts to derail the deployment of THAAD undermine American security in a critical way. 

The struggle with Beijing over the missile-defense system has an historical parallel: Ronald Reagan’s contest with the Soviets over the deployment in Germany of the Pershing II cruise missile.
And this means the United States has a vital interest in supporting its South Korean ally. 

The one tactic Washington can employ is the one China used against Japan in 2012 and is using against South Korea now: economic coercion. 

The way to defend America is to support South Korea. 

The way to support South Korea is to sanction China.
Beijing thinks it can bully little economies. 

Chinese officials should remember that their economy is far smaller than America’s. 

Last year, China’s gross domestic product, as reported by the official National Bureau of Statistics, was $10.83 trillion. 

America’s, according to the first estimate of the Bureau of Economic Analysis, was $18.86 trillion. 

In reality, the disparity is almost certainly larger due to Beijing’s obvious overreporting.
If China can punish “a small country,” so can the United States.