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China seeking to punish South Korean firms on missile defense plans

Tensions are surging in China after a decision pushed forward plans to deploy a U.S. anti-missile system in South Korea.

The government decided last year that it would launch the defense system on land that is owned by Asian giant Lotte. Earlier this week, the company finally agreed to hand over use of that property parcel.

China has long expressed outrage over the deal and the missile defense system launch itself. Now, those battle cries are rising. Over the last few days, state media outlets have published strong commentary condemning the move, warning that Lotte should be pushed out of the country, and even calling for Chinese consumers to boycott Korean brands from Samsung to Hyundai.

"Showing Lotte the door will be an effective warning to all the other foreign forces that jeopardize China's national interests," the state-run Global Times wrote Tuesday. "This is the dignity China should have as a major power."

A spokesperson for China's Foreign Ministry also warned yesterday that the Chinese market and its consumers would decide whether foreign firms were successful.

A United States Army missile defense system, Terminal High Altitude Area Defense (THAAD).
Source: Department of Defense
A United States Army missile defense system, Terminal High Altitude Area Defense (THAAD).

These threats spell trouble for Korea — China is its largest export market, sending $125 billion worth of goods last year, according to the Korea Customs Service. Korean firms, like many other foreign companies, have benefited from the spending power of China's fast-growing middle class.

China appeared to be advancing on its warnings — a Lotte supermarket in Beijing was fined 44,000 yuan ($6,400) for illegal advertising, according to a local media report.

Even before the decision, unofficial sanctions were already under way. Requests by Korean airlines to increase flights between the two countries were recently rejected.

Shoring up regional defense capabilities are a priority as North Korea has re-emerged as a potential conflict hot potato, after having tested nuclear devices and missiles several times last year.

Lotte, based in Korea and Japan, has a wide range of businesses, including candy, hotels, retail and construction.

—Barry Huang contributed to this report.

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