Samsung and other South Korean companies’ exodus from China sets an example to Western firms fleeing

South China Morning Post ^ | 7:00am, 4 Jul, 2019 | Finbarr Bermingham,Lee Jeong-ho

[Zhang Fei]

Upon landing in Australia in 2017 to attend a seminar, a senior politician with South Korea’s parliamentary defence committee was greeted by Julie Bishop, then Australia’s foreign minister, who had a burning question: “How are you dealing with the China threat?”

Bishop was referring to the treatment of South Korean firms in China, which escalated after Seoul agreed in 2016 to a long-standing request from the United States to allow the deployment of the Terminal High Altitude Area Defence system (THAAD) on South Korean soil.

Lotte Corporation, one of Korea’s chaebol conglomerates that dominate its economy, had sold a plot of land in Seongju county to the South Korean government, on which the system’s radar and interceptor missiles were set up. While both Washington and Seoul said it was meant to counter threats from North Korea, Beijing viewed THAAD as a security risk, since its radar had the range to monitor China’s nearby military facilities.

After it was deployed in 2017, THAAD triggered widespread boycotts of Lotte’s retail operations in China, with the state-owned media acting as aggressive cheerleaders. The company was sanctioned by Beijing, with its expansion plans in China grinding to a halt on the orders of the Chinese government.

“We have experienced some of the worst situations in China over the past few years and learnt that the political risk there wouldn’t just simply go away overnight,” said a former manager of Lotte Shopping, the chaebol’s retail arm, who spoke on condition of anonymity.

“China may pass all the legislation ensuring the safety of foreign investments and the rights of multinational companies, but the chance of it swinging away again when there is another political confrontation is just too high … we cannot afford to take any more risk.”

[tired&retired]

Play with fire and you get burned... eventually.

[Old Teufel Hunden]

And this article reflects the true motivation and reasoning behind the trade war with China. I don’t like trade wars, I’m a free trader but this has nothing to do with trade. China is an existential threat to all liberal democracies and we have been giving them the economic tools to wage their soft war.

What does China create or innovate? Nothing, they steal because they are communist who hate our way of life. The true strength of our soft war with them has been staring us in the face. We don’t need them. Everything they do for us can be done in other countries. And now, slowly but inevitably this trade war and China’s own tendency to use unfair economic tools to advance their dominance is making not only America but the rest of the world move the global supply chain away from China. There are plenty of other countries willing and able to do what China does for business (Vietnam, Thailand, India, Phillipines, etc...). And they will do it within the community of nations.

[LS]

File under “Tariffs Don’t Work” dead file.