Improving economic ties will help address THAAD issue: expert
The Chinese branch of South Korea's Lotte Group, one of that country's largest holding companies, confirmed to the Global Times on Thursday media reports that its homeshopping subsidiary may sell a 49 percent stake to a Chinese company.
An expert said that as the frozen economic ties between China and South Korea, due to the latter's deployment of the US Terminal High Altitude Area Defense (THAAD) anti-missile system, began to show signs of thawing, gradual economic progress could help cement achievements made after South Korean President Moon Jae-in's visit to China in December.
China strongly opposes the deployment of THAAD missile defense system.
Lotte Group was at the center of the THAAD issue, by offering land for the battery site.
Most of the company's Lotte Mart supermarkets were closed in China in 2017 and the company reportedly posted huge losses.
In a statement sent to the Global Times on Thursday, the company said its business prospects in China are unclear, and subsidiaries including Lotte homeshopping, which distributes media content, and the Lotte Mart supermarkets are undergoing restructuring.
"However, as the company has repeatedly stated, the latest development does not mean that Lotte Group is considering exiting the Chinese market," read the statement.
The transaction involving Lotte Homeshopping (China) doesn't mean that unit will leave China either, according the statement.
Media reports have said some South Korean companies, especially those in the tourism sector, hope to regain lost Chinese market share in 2018 as bilateral ties have begun to show signs of improvement.
Hyundai Motor Group said it hopes to sell 900,000 cars this year in China together with its KIA brand, after suffering a 36 percent decline in sales in 2017, South Korea's ajunews.com reported on Thursday.
Lü Chao, an expert on Korean studies at the Liaoning Academy of Social Sciences, told the Global Times that there is no other major issue that can shake the cooperative relationship between China and South Korea once the THAAD issue is properly solved.
"Economic and trade cooperation between China and South Korea involves mutual benefits and win-win cooperation. In particular, the deepening cooperation boosted by the [China-South Korea] free trade agreement... will drive cooperation in the culture and sports sector," Lü said.
Lü noted that some achievements have been made since Moon's visit to China. But the solution is "far from a complete one," Lü said. "THAAD is still an obstacle to relations between China and South Korea."
"On the other hand, the gradual improvement of political, economic and cultural relations between the two sides can promote the reaching of a complete solution over the issue of THAAD," Lü said.
According to data from the Ministry of Commerce (MOFCOM) released in December 2017, trade between China and South Korea reached 3.7 billion in the first 11 months of 2017, up 12.1 percent from the same period last year.
There are 63,000 South Korean-invested projects with an overall investment volume of .6 billion in China.
Chinese exports to South Korea include telecommunications, agricultural products, clothing, machinery, steel products and semiconductors.
Lü predicted that there will be more exchanges between the cultural industries of China and South Korea in 2018.
This includes a strong influx of K-dramas soap operas into China, and the expansion of the South Korean beauty and medical industries, video gaming and garments, Lü said.
For some sectors, industry requirements mean that bilateral trade wasn't affected.
Xie Luo is the general manager of ROBOTIS China, a branch of South Korean robot manufacturer ROBOTIS. Established in September 2016 in Beijing, ROBOTIS China sells actuators and servos that enable the creation of robots and kits.
"For the smart industry, there were no restrictions by the Chinese government in matters such as imports, and even amid the turbulence in 2017, we were not affected," Xie told the Global Times Thursday.
Xie said her company imports specialized robots from South Korea for sale to Chinese customers.
"With our expertise, we have high expectations for 2018 and hope we can impress more Chinese kids, which is of great benefit to our business," Xie said.
The two sides have implemented three rounds of tax cuts since the China-South Korea free trade agreement came into effect in December 2015, benefiting industries and consumers from the two countries, according to the MOFCOM.
The two sides are preparing for a new round of trade talks for a potential upgrade in 2018.