S.Korean firms flock to Beijing hoping summit will hasten thaw with China

Amorepacific

13/12/2017 10:02

* S.Korea's largest biz delegation ever joins Moon's China 
trip 
    * Basis for "stable economic cooperation" needed-S.Korea's 
Moon 
    * Hoped next step in improving Beijing-Seoul 
relations-officials 
 
    By Joyce Lee and Christine Kim 
    SEOUL, Dec 13 (Reuters) - Hoping a thaw in relations with 
China will reopen opportunities after a diplomatic spat earlier 
this year cost many of them business, some 300 South Korean 
executives joined President Moon Jae-in for the start of his 
four-day trip to China on Wednesday. 
    The delegation was the largest to accompany a South Korean 
leader abroad, and reflected the value the firms placed on 
mending ties with their country's biggest trading partner. 
    Trade and business exchanges between the two countries froze 
earlier this year after South Korea deployed U.S.-made Terminal 
High Altitude Area Defence (THAAD) anti-missile system 
regardless of vehement objections from Beijing. urn:newsml:reuters.com:*:nL3N1OC1ZZ  
    Among those who travelled were executives from some of the 
firms hit hardest by the backlash, including Lotte Group 
 004990.KS  and cosmetics and entertainment firms such as 
Amorepacific  090430.KS  and S.M. Entertainment  041510.KQ . 
    Addressing around 500 Chinese and South Korean businessmen 
at a forum in Beijing, Moon stressed the need to "build a 
systemic foundation for a stable economic cooperation". 
    Moon said he expects to sign a memorandum with President Xi 
Jinping at a summit on Thursday, a step toward follow-up 
negotiations of the South Korea-China Free Trade Agreement (FTA) 
concerning services and investments. 
    "This is expected to expand the entry of both countries' 
companies into service industries, and revitalise mutual 
investments," he said.  
     
    GRADUAL STEPS 
    The THAAD disagreement knocked about 0.4 percentage points 
off expected economic growth in South Korea this year and 
resulted in lost revenues of around $6.5 billion from Chinese 
tourists in the first nine months of the year, as the number of  
visitors fell by half. 
    Anti-South Korean sentiment also battered firms' sales of  
entertainment, cosmetics and cars in China.  
    Multiple officials from South Korea's largest companies told 
Reuters they hoped that Moon's visit to China would mark the 
next step toward improving ties after the two governments 
reached an initial agreement in late October to move past the 
dispute.  urn:newsml:reuters.com:*:nL4N1N643M  
    Still, they were doubtful whether a sudden turnaround in 
business relations would be achieved over the coming days. 
    "If you look at earlier cases, it takes several, gradual 
steps for unspoken reprisals to be eased," said an official from 
a Korean firm accompanying Moon who declined to be identified as 
the matter was sensitive.  
    "We're hoping this is a key step." 
    Reuters spoke to around 20 of the South Korean firms 
represented in the delegation, and none had any fresh investment 
or business deal announcements planned. 
    Instead, an official at game developer Wemade Entertainment 
Co Ltd, whose CEO attended the forum, said executives would be 
looking to reopen dialogue with Chinese counterparts.  
    "Rather than having a specific agenda, we are hoping for a 
space to discuss various matters," the official said. 
 
    A POSSIBLE OPENING  
    In late November, China allowed travel agencies in Beijing 
and Shandong to resume some sales of group tours to South Korea, 
but tour agencies were told not to include South Korean 
retail-to-chemicals giant Lotte Group in travel packages. 
 urn:newsml:reuters.com:*:nL3N1NY20K  
    Lotte, which provided the land where the THAAD system was 
installed, was hardest hit in the diplomatic standoff.  
    Its chain of hypermarkets and supermarkets in China were 
largely shuttered, and it is expected to sell the stores for a 
fraction of what it invested.  urn:newsml:reuters.com:*:nL4N1MN1AO 
    The conglomerate previously said it planned to sell the 
stores by the end of this year, but the talks have been in "a 
stalemate," a Lotte Group official said, declining to be 
identified due to the sensitivities.  
    Still, the official hoped the summit would ease the way for 
the planned sales of hypermarkets in China and lead to a full 
lifting of group tour bans. 
    "We have big hopes about the summit," the official said.     
 
 (Reporting by Joyce Lee and Christine Kim; Additional reporting 
by Hyunjoo Jin, Heekyong Yang, Yuna Park and Jane Chung; Editing 
by Simon Cameron-Moore) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: SOUTHKOREA CHINA/COMPANIES