As missile row drags on, South Korea's Lotte still stymied in China

Hotel Shilla

16/06/2017 11:01

By Heekyong Yang and Hyunjoo Jin 
    SEOUL, June 16 (Reuters) - Five weeks after a liberal 
president took office in South Korea pledging to ease tensions 
with China over a controversial missile defense system, the 
company at the centre of the dispute says it has yet to see any 
improvement. 
    Lotte Group, which provided land in South Korea for the U.S. 
THAAD missile system, says it has fixed safety issues at dozens 
of its Lotte Mart retail stores in China which local fire 
authorities had shut down earlier this year. 
    The family-run Korean conglomerate said it has repeatedly 
asked fire authorities to come and inspect the stores. Some 
stores have had no response, while others have simply been told 
to wait, said a Lotte official in Shanghai. 
    "Not a single visit has been made in the past couple of 
months," said a Lotte Mart official in Seoul. 
    Seventy-four of Lotte's 99 Mart stores in China were closed 
by fire authorities over safety violations such as boxes 
blocking exit doors. 
    South Korea and ally the United States say the THAAD system 
is designed to thwart nuclear-armed North Korea's missile 
threat, but Beijing says the system's powerful radar can also 
reach far into its territory. 
    China has pressured South Korean businesses via boycotts and 
bans, such as ending Chinese group tours to South Korea, but 
Lotte has been among the hardest hit by moves seen as punishment 
for it agreeing to hand over a golf course it owned in southern 
South Korea so the Terminal High Altitude Area Defense (THAAD) 
battery system could be installed there. 
    "We are seriously worried. We did not expect the shutdown to 
last this long. We thought China would just scare us and that's 
it," said the Lotte official in Seoul. 
    That official said Lotte Mart, a supermarket chain run by 
Lotte Shopping  023530.KS , has been losing around 100 billion 
won ($88.5 million) a month in wages and lost sales since March, 
and can't lay off its 12,000 staff under Chinese rules, though 
it can reduce pay. 
    Lotte had hoped the election of Moon Jae-in as South Korea's 
president on May 9 would signal an easing of its problems in 
China as Moon had vowed to review the previous government's 
deployment of the THAAD system. 
    Last week, Moon ordered THAAD's full deployment be suspended 
until a review of its environmental impact. But Seoul has also 
sought to assure the United States, saying the deployment 
decision won't be reversed and the elements of the battery 
already installed - two of six launchers and a powerful radar - 
would stay.  urn:newsml:reuters.com:*:nL3N1J62TY 
    China's President Xi Jinping said on May 19 he wanted to put 
ties with South Korea back on a "normal track", but Beijing 
urged Seoul to respect its concerns and resolve tensions over 
the THAAD deployment.  urn:newsml:reuters.com:*:nL4N1IL1UV 
    "We remain pessimistic," said the Lotte official in Seoul. 
"Unless Korea offers concrete benefits to China, it will be 
difficult for China to allow the re-opening of our stores." 
 
 (Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Soyoung 
Kim and Ian Geoghegan) 
 ((Heekyong.Yang@thomsonreuters.com;)) 
 
Keywords: LOTTE CHINA/