On top of its ban on Korean dramas, China is accused of employing other tools to thwart South Korean businesses in China including tax audits, unexpected inspections and indefinite delays on any decisions.
In recent years, analysts have been pointing out that the relationship between Seoul and Beijing could not be better — but things have changed after the former’s decision this July to deploy an advanced U.S. missile defense system.
On top of its ban on Korean dramas, China is accused of employing other tools to thwart South Korean businesses in China including tax audits, unexpected inspections and indefinite delays on decisions.
China recently launched anti-dumping probes on polyoxymethylene and polysilicon products made by South Korean manufacturers, which are necessary for automotive parts and solar cells, respectively.
Also on the lips of watchers is Beijing’s refusal to give the green light to a request by Korean Re, the country’s sole homegrown reinsurer, which is trying to open a branch in Shanghai.
Originally, the company expected to get the approval without much problem but procedural slowness and uncertainty prompted it to withdraw some of its employees from Shanghai.
Critics also raise suspicions that China is introducing non-tariff barriers to strain South Korean exporters, such as delaying or rejecting customs entry for made-in-Korea products.
Indeed, China rejected entry of South Korean products 148 times over the first three quarters of this year, which is already higher than last year’s total of 130 times.
Lotte Group’s 22 Chinese units faced tax audits plus inspections for sanitary and fire risks, which observers relate to the fact the Seoul-based conglomerate is set to provide land for the Terminal High Altitude Area Defense (THAAD) system.
South Korea plans to install the THAAD system next year to tackle North Korean missile threats but the move raised the ire of China which claims its radar can also monitor airborne objects in China.
Late last month, things worsened after Seoul signed an agreement with Tokyo for the two neighbors to share military intelligence, which Beijing has also strongly opposed.
The soured Sino-Korean relationship negatively affects not only business circles but also the entertainment and political arenas.
In the aftermath of the THAAD decision, for example, a number of Korean celebrities were reportedly forced to cancel their scheduled events in China where Korean pop culture had enjoyed popularity.
Late last month, news reports said the Beijing administration banned airing of Korean dramas and movies with some restrictive exceptions.
A local news outlet also reported last week that China sent relatively low-level officials to events hosted by the South Korean embassy in Beijing unlike past years when minister- or deputy minister-level senior bureaucrats participated.
In addition, suspicions arose that China discourages Chinese group tours to South Korea. If true, it would be a big blow to the South Korean tourism industry, which relies heavily on visitors from the world’s most populous country.
Beijing has officially denied the allegations that it is pressuring Korean businesses or banning Korean dramas due to THAAD or the Korea-Japan intelligence agreement. However, few here seem to believe their explanation.
Experts express worries that the administration lacks the capability to deal with the situation because of the corruption scandal involving President Park Geun-hye and her confidant Choi Soon-sil, who is suspected of having illegitimately meddled in state affairs.
“Who would take the tall task of improving relation with China at a time when our political leaders cannot properly handle state and diplomatic affairs because of the scandal?” said a professor at a university in Seoul.