China suspected of retaliating against Lotte over THAAD deployment

By Park Man-won and Son Il-seon

Chinese authorities have recently conducted unexpected fire safety inspections across 20 retailers of South Korea’s large conglomerate Lotte Group in China and embarked on tax audits on Lotte affiliates, raising suspicions that Beijing was retaliating Seoul’s decision to deploy a Terminal High Altitude Area Defense (THAAD) at a golf course owned by Lotte.

According to Lotte Department Store of Chengdu in Sichuan Province on Thursday, the city’s fire authority performed a fire safety check for two hours on Tuesday. An unnamed official from the department store said the company is waiting for the inspection results and following measures.

The latest fire safety inspection was an unexpected, additional safety check by Chinese municipal authority, which is separate from an annual safety check planned this week by Sichuan Province’s fire authority. It will be also the first fire safety inspection by provincial authority, not by municipal authority, since the opening of the store three years ago.

Lotte Department Store of Shenyang, Liaoning Province, is also worried about possible regulatory measures after a sudden fire safety check by the city’s fire authority, according to sources. More than 20 retailers of Lotte including Lotte Mart and Lotte Super in Beijing also went through fire protection check over the past few days, adding to presumption that Lotte may have become a casualty case from the Korean government’s decision to deploy the THAAD missile on the conglomerate’s golf course in Seongju, North Gyeongsang Province.

“If the Chinese authority notifies regulatory measures such as business suspension against Lotte, it would affect other Korean businesses operating in China,” a source from the retail industry warned. An official from Embassy of Korea in China also said, “It is highly possible that Beijing targeted Lotte in punitive actions due to its decision to allow (the Korean government) to use its golf course site for THAAD."

The Chinese municipal authorities have also been running tax audits for Lotte affiliates including Lotte Department Store and Lotte Chemical operating in China since Tuesday, further raising suspicions about possible retaliatory actions.

The world’s second largest market unhappy with Korea’s decision to deploy the THAAD missile equipped with powerful radar that can reach China has been blatantly upping offensive on trade front against the neighboring country.

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