03-12-2019, 06:26 PM
** 12-Mar-2019 World View: Is China's economic boycott of South Korea thawing?
China's largest insurance company, Ping An Insurance, announced that
it will send 3,700 employees to South Korea as an incentive trip. The
employees will be arriving in groups of 50 over the next two months.
Why is this big news? It's news because such trips have been banned
by the Chinese Communist Party (CCP) since March 2017, when the CCP
announced an extremely harsh boycott on Korea, in retaliation for the
Korean government's deployment of America's Terminal High Altitude
Area Defense (THAAD). The CCP boycott banned South Korean goods for
sale in China, South Korean pop stars and entertainers, and packaged
tours, cruise tours and charter flights to Korea.
So the Ping An Insurance incentive trip to South Korea is a clear
violation of the boycott, which means that the CCP must be lifting
some parts of the boycott. I'm going to guess that this is happening
because of pressure by Ping An employees who would not consider an
"incentive trip" to another Chinese city to be a particularly exciting
and motivating prospect.
In fact, the CCP has already lifted the ban on tour packages for some
cities. In October last year, 600 employees from Chinese cosmetics
brand Anya Cosmetics came to Korea on a corporate incentive tour.
Ping An's incentive trip includes stops at duty-free shops of Korea’s
second and third largest duty-free retailers, Shinsegae Duty Free and
Shilla Duty Free.
However, noticeably absent from Ping An's itinerary were visits to
retail shops for the largest, Lotte Duty Free, a subsidiary of South
Korea's multinational conglomerate Lotte Group. In 2017, Lotte agreed
to a land swap that allowed THAAD to be deployed on a piece of land
previously owned by the company. This enraged the Chinese government
so much that Lotte is not likely to be forgiven any time soon, even if
other parts of the boycott are lifted.
Historically, for many centuries, Korea was part of China's "tributary
system." Korea was not a colony of China, since it is not governed by
China. But Korea would pay a substantial tribute to China, often
consisting of gold or slaves. In return, China would guarantee not to
invade Korea, and would even promise to defend Korea from a foreign
enemy (usually Japan). Korea remained a tributary state until Japan
succeeded in colonizing Korea in 1912.
Although China did not govern or control Korea, it was required that
when China ordered Korea to do something, Korea would have to do
it, or risk being punished.
In the case of North Korea, president Kim Jong-un continued ballistic
missile and nuclear weapons tests, despite commands from China's
president Xi Jinping to stop them. As a result, China punished North
Korea by allowing the United Nations Security Council to adopt harsh
anti-North Korean sanctions.
In the case of South Korea, China ordered the government NOT to allow
the deployment of the American anti-missile system THAAD. South Korea
deployed the systems anyway, in reaction to the ballistic missile and
nuclear weapons tests by North Korea -- tests that ironically China
had tried to prevent. So the Chinese punished South Korea's
disobedience with the harsh boycott.
Now that time has passed, China has been reducing the punishments. In
the case of North Korea, China has been urging lifting the sanctions,
and has been supporting and accommodating large-scale cheating by the
North Koreans, particularly to import petroleum and export coal. In
the case of South Korea, we see limited lifting of the boycott,
presumably in response to demands by Chinese company employees, with
most of the boycott remaining in effect.
However, easing of the boycott is coming too late for many
South Korean companies.
Lotte's supermarket business Lotte Mart will soon exit North China's
Tianjin Municipality, leaving only three stores in the Chinese
mainland.
South Korean auto makers Kia Motors and its parent Hyundai Motor have
both announced that they are considering halting operations in some of
their plants in China.
Kia's sales in China fell 44% in 2017 following the CCP boycott of
South Korean products. Sales recovered only 9% in 2018.
Hyundai was once China's third-biggest auto brand. Hyundai has the
capacity to produce more than 1.6 million vehicles in China, but only
sold 820,000 in 2017.
Hyundai and Kia are being affected not only by the boycott, but also
by generally declining auto sales in China, the world's biggest car
market. Sales of new vehicles declined in 2018 for the first time in
almost 30 years, amid falling consumption and a growing second-hand
sector.
--- Sources:
-- China’s Ping An Insurance to send 3,700 employees to Korea on
incentive trip
https://pulsenews.co.kr/view.php?year=2019&no=148650
(Pulse News, Korea)
-- Korea / Hyundai Motor / Kia considers plant closures in China
https://www.just-auto.com/news/kia-consi...87626.aspx
(Just Auto)
-- KIA considering China production halt amid sales slowdown
http://www.china.org.cn/business/2019-03...557526.htm
(Xinhua, China)
-- Kia, Lotte failures reflect S.Korean firms' ignorance of Chinese
market: analyst
http://www.globaltimes.cn/content/1141723.shtml
(Global Times, China)
China's largest insurance company, Ping An Insurance, announced that
it will send 3,700 employees to South Korea as an incentive trip. The
employees will be arriving in groups of 50 over the next two months.
Why is this big news? It's news because such trips have been banned
by the Chinese Communist Party (CCP) since March 2017, when the CCP
announced an extremely harsh boycott on Korea, in retaliation for the
Korean government's deployment of America's Terminal High Altitude
Area Defense (THAAD). The CCP boycott banned South Korean goods for
sale in China, South Korean pop stars and entertainers, and packaged
tours, cruise tours and charter flights to Korea.
So the Ping An Insurance incentive trip to South Korea is a clear
violation of the boycott, which means that the CCP must be lifting
some parts of the boycott. I'm going to guess that this is happening
because of pressure by Ping An employees who would not consider an
"incentive trip" to another Chinese city to be a particularly exciting
and motivating prospect.
In fact, the CCP has already lifted the ban on tour packages for some
cities. In October last year, 600 employees from Chinese cosmetics
brand Anya Cosmetics came to Korea on a corporate incentive tour.
Ping An's incentive trip includes stops at duty-free shops of Korea’s
second and third largest duty-free retailers, Shinsegae Duty Free and
Shilla Duty Free.
However, noticeably absent from Ping An's itinerary were visits to
retail shops for the largest, Lotte Duty Free, a subsidiary of South
Korea's multinational conglomerate Lotte Group. In 2017, Lotte agreed
to a land swap that allowed THAAD to be deployed on a piece of land
previously owned by the company. This enraged the Chinese government
so much that Lotte is not likely to be forgiven any time soon, even if
other parts of the boycott are lifted.
Historically, for many centuries, Korea was part of China's "tributary
system." Korea was not a colony of China, since it is not governed by
China. But Korea would pay a substantial tribute to China, often
consisting of gold or slaves. In return, China would guarantee not to
invade Korea, and would even promise to defend Korea from a foreign
enemy (usually Japan). Korea remained a tributary state until Japan
succeeded in colonizing Korea in 1912.
Although China did not govern or control Korea, it was required that
when China ordered Korea to do something, Korea would have to do
it, or risk being punished.
In the case of North Korea, president Kim Jong-un continued ballistic
missile and nuclear weapons tests, despite commands from China's
president Xi Jinping to stop them. As a result, China punished North
Korea by allowing the United Nations Security Council to adopt harsh
anti-North Korean sanctions.
In the case of South Korea, China ordered the government NOT to allow
the deployment of the American anti-missile system THAAD. South Korea
deployed the systems anyway, in reaction to the ballistic missile and
nuclear weapons tests by North Korea -- tests that ironically China
had tried to prevent. So the Chinese punished South Korea's
disobedience with the harsh boycott.
Now that time has passed, China has been reducing the punishments. In
the case of North Korea, China has been urging lifting the sanctions,
and has been supporting and accommodating large-scale cheating by the
North Koreans, particularly to import petroleum and export coal. In
the case of South Korea, we see limited lifting of the boycott,
presumably in response to demands by Chinese company employees, with
most of the boycott remaining in effect.
However, easing of the boycott is coming too late for many
South Korean companies.
Lotte's supermarket business Lotte Mart will soon exit North China's
Tianjin Municipality, leaving only three stores in the Chinese
mainland.
South Korean auto makers Kia Motors and its parent Hyundai Motor have
both announced that they are considering halting operations in some of
their plants in China.
Kia's sales in China fell 44% in 2017 following the CCP boycott of
South Korean products. Sales recovered only 9% in 2018.
Hyundai was once China's third-biggest auto brand. Hyundai has the
capacity to produce more than 1.6 million vehicles in China, but only
sold 820,000 in 2017.
Hyundai and Kia are being affected not only by the boycott, but also
by generally declining auto sales in China, the world's biggest car
market. Sales of new vehicles declined in 2018 for the first time in
almost 30 years, amid falling consumption and a growing second-hand
sector.
--- Sources:
-- China’s Ping An Insurance to send 3,700 employees to Korea on
incentive trip
https://pulsenews.co.kr/view.php?year=2019&no=148650
(Pulse News, Korea)
-- Korea / Hyundai Motor / Kia considers plant closures in China
https://www.just-auto.com/news/kia-consi...87626.aspx
(Just Auto)
-- KIA considering China production halt amid sales slowdown
http://www.china.org.cn/business/2019-03...557526.htm
(Xinhua, China)
-- Kia, Lotte failures reflect S.Korean firms' ignorance of Chinese
market: analyst
http://www.globaltimes.cn/content/1141723.shtml
(Global Times, China)
