[Courtesy of Lotte Mart]
Undeterred by a Chinese stranglehold, South Korea's Lotte group went ahead with a board meeting Monday to endorse a property swap for the deployment of an advanced US missile shield that sparked a thorny diplomatic spat between Asia's two major trading partners.
The board of a Lotte subsidiary approved the transfer of a golf course as the site for the deployment of a Terminal High Altitude Area Defense (THAAD) system in return for military-owned land at the northeastern suburb of Seoul, the defense ministry said.
The decision by South Korea's fifth-largest conglomerate has been closely watched by Beijing which argued the US missile shield would "seriously" hurt strategic interests of China and the security balance in Northeast Asia.
The ministry promised to step up preparations for the installment of a THAAD battery as scheduled, saying the golf course in Seongju has all the necessary infrastructure for a military installation like electricity, water and roads.
South Korea's business community has expressed concern about China's trade retaliation that followed restrictions on K-pop stars.
"Lotte will hurt the Chinese people and the consequences could be severe," China's Xinhua News Agency said in an English-language commentary on February 19. "The Chinese people will not support a company complicit in damaging China's interests."
The retail giant heavily depends on Chinese consumers and tourists. Last year, about 70 percent of income at its duty-free stores came from Chinese visitors. Total sales at Lotte's business outlets in China were estimated at 3.2 trillion won (2.8 billion US dollars).
Since the swap was proposed in September last year, Lotte's business in China has already been in trouble. Last year, China carried out an extensive fire safety, sanitary and tax probe. Lotte also halted a three trillion won project to build a theme park in Shenyang, Liaoning Province.
In February, Lotte decided to close three supermarkets in the vicinity of Beijing, citing a worsening business environment, though group officials said the decision was not directly related to a THAAD row
Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
