What you need to know
South Koreans are once again losing out to China.
South Korea continues to suffer financial losses after it upset China with a decision to deploy a Terminal High Altitude Area Defense (THAAD) system in July last year.
According to the U.S. and South Korea the defense system is to protect against the threats posed by North Korea. China is worried, however, that the U.S. will use THAAD to spy on its military. China's foreign ministry said that the THAAD system will harm peace and stability in the region, despite its ability to detect and shoot down North Korean missiles, BBC reports.
More than six months on, China continues to restrict the airing of South Korean movies and television shows as well as live performances by Korean artists and stars in China, BBC quotes Yonhap News Agency as reporting. The Yonhap News Agency reported in January that China also would cancel subsidies for “green” vehicles that used batteries from Korean companies.
China has denied retaliating against South Korea’s deployment of the new defense system. However, the lack of access to the massive Chinese market appears to be hurting the Korean entertainment sector, with some players seeing their stock values plummet by almost 50 percent compared to a year ago.
According to chaebul.com, a South Korean website that evaluates the wealth of Korean businesspeople, the combined losses of 12 entertain-linked South Koreans amounted to 239.3 billion won (US$209 million), a 40.7 percent drop since the deployment of THAAD was announced last July. That included S.M. Entertainment’s Lee Soo-man and YG Entertainment’s Yang Hyun-suk; the former stars have seen their value plunge 45%, losing 82.4 billion won and 77 billion won during the past six months respectively.
South Korean observers attribute the losses to a perceived “ban” in China on Korean cultural products. Experts see little hope for the entertainment companies' share prices to rebound this year with the THAAD issue and a tough exchange rate environment expected to persist, Korea Times reports.
After THAAD was announced, many Chinese netizens appeared to oppose the new defense system and threatened to boycott South Korea’s popular entertainers. Some left comments such as, “no idols before countries” and “Korea is being ungrateful by harming China’s interest while making our money” on Weibo and WeChat, Liberty Times reports. “No idols before countries” went on to become a trending hashtag on Weibo last July, The New Paper reports.
The Chinese government criticized South Korea’s decision to install THAAD last July. Still, when North Korea conducted a nuclear test in September 2016, there were also Chinese netizens who thought China was taking a soft stance on North Korea and questioned why China would oppose South Korea for deploying THAAD, CNA reports.
Editor: Edward White