SOUTH KOREA: THAAD Anti-missiles,China Orders Travel Agencies To Stop Selling Trips To South Korea

South Korea suffered a 40% plunge in Chinese visitors last month, according to the Korea Tourism Organization.

Chinese tour groups have been canceling trips because of anger over the deployment of a controversial U.S.-built missile defense system in South Korea.

Chinese authorities are believed to have told travel agencies last month to stop selling trips to South Korea.

The outlook is bleak, too. Bookings for stays of four to eight nights by Chinese visitors are down 28% in the second quarter of 2017 compared with a year earlier.

China has vigorously opposed the stationing of the THAAD anti-missile system in South Korea, complaining that it threatens security and fuels tensions in the region.

The South Korean government says the system is designed to reduce the threat from North Korean missiles.

South Korean businesses that rely on foreign tourists are feeling the chill. Chinese citizens accounted for eight million of the roughly 17 million people who visited South Korea last year and are big spenders.

There's been a big reduction in the number of groups of Chinese tourists in Seoul since the THAAD missile crisis, said Kil Ki-yon, the director of Seoul Tiger Bus, a company that takes Chinese visitors on tours of the city.

South Korean conglomerate Lotte said its duty free stores have taken a huge hit, too.

Sales to Chinese customers between mid-March and mid-April plunged 40% from a year earlier, according to a spokesman for the group.

Chinese tourists tend to account for as much as 80% of duty free sales, he added.

The difficulties come at a time when outbound travel by China's burgeoning middle class is surging. The Chinese spent $261 billion traveling abroad last year, according to the World Tourism Organization, a 12% increase compared with the previous year.

ForwardKeys said Southeast Asian countries are the most likely to benefit from South Korea's problems with China.

The tensions between Beijing and Seoul over THAAD show little sign of easing.

South Korea is pushing ahead with the system, parts of which have now arrived at the planned deployment site, the South Korean Defense Ministry said Wednesday.

In response, the Chinese Foreign Ministry reiterated its opposition, warning that "China will firmly take necessary measures to safeguard its own interests."

SOUTH KOREA: More Halal Restaurants Planned

The Korean government is planning to expand the number of Muslim-friendly restaurants here.

Korea Tourism Organization announced that it will expand the number of such restaurants from 135 to 170 to help reach its goal of hosting 1.2 million Muslim tourists this year.

It started receiving applications from local restaurants Monday and will continue to do so until April 28.

The measure is part of the KTO’s plan to diversify the country’s tourism market, in anticipation of declining numbers of Chinese tourists due to a recent diplomatic spat between Beijing and Seoul surrounding the deployment of an advanced US missile defense system here.

The Korea-US alliance decided last year to station the Terminal High Altitude Area Defense system here, which China claimed was against its strategic interest.

The Beijing government has been curbing Chinese tours to Korea, including a reported order to ban its tourism agencies from selling Korea-related programs.

This is a severe blow for the local tourism industry, as 8.05 million of the 17 million foreigners who visited the country last year were Chinese.

“Since the need to expand the tourism market is greater than ever, we will attempt to raise the number of Muslim tourists from 980,000 last year to 1.2 million,” said Park Jeong-ha, director of KTO’s marketing planning team.

The number of Muslims visiting Korea in 2016 increased by 33 percent compared to the year before.

Meanwhile, the KTO has been seeking to expand the number of tourists from countries other than China.

“We allocated a lot of budget that was originally directed at the Chinese market to other regions like Southeast Asian countries,” said a KTO official.

The KTO’s standard for Muslim-friendly restaurants has four categories; those that are halal-certified by the Korea Muslim Federation, those that are self-certified by owners and cooks as being Muslim and using exclusively halal ingredients, those that sell halal food but also sell alcohol which is banned for Muslims-- and those that are free of pork, which is also banned by Islam.

Korea Tourism Organization plans to attend tourism exhibitions in countries with a large Muslim population, such as one in Kazakhstan in late April along with tourism trade shows in Malaysia and Indonesia in the second quarter.

The KTO will also launch a weeklong halal festival for Muslim travelers in September, during which local food made according to halal rules will be featured.

However, whether many Korean restaurants will apply for the halal certification remains to be seen, as some feel that the certification would not be worth the effort and cost.

Cho Hee-kyung, the owner of three Michelin star restaurant Gaon and one Michelin star restaurant Bicena, expressed difficulties in receiving the halal mark.

“In the past, I looked to receive the certification, but there are lots of preparations to be made. Everything has to be different, from the cutting board to knives,” she said, adding that her restaurants have given up on it.

To be halal-approved, operators of the restaurant also have to undergo a training program presented by the Certified Halal Internal Auditor.

Furthermore, Cho said that her restaurants -- which are popular among foreign visitors -- has attracted plenty of Muslim customers with its vegetarian menu, even without the halal seal of approval.

Instead of just focusing on halal certificates, she said the more important thing would be to find aspects of Korean traditional dishes that can be appreciated by foreigners.

“One of the strong points of Korean dishes is its vegetarian menu. I think it would be better for us to present something new that has its own value,” she said.

Despite this, Cho agreed that more Muslim-friendly restaurants would be “the way to go,” given the huge Muslim demographic.

“It is a huge market, and it’s important to target it. As a restaurant, it is only natural to want to attract a wider range of customers,” she said.

CHINA: South Korea And China Misunderstandings, Airlines Most Affected

Escalating tensions between China and South Korea over the deployment of a U.S. missile defense system are now threatening to engulf air travel as some carriers start to suspend popular services between the two countries.

Eastar Jet, a South Korean budget airline, said on its website that flights from Cheongju to China’s Harbin, Ningbo and Jinjiang will be stopped temporarily starting as early as March 15 through Oct. 28 because of “worsening relations.”

Seoul-based Jin Air, a unit of Korean Air Lines Co., said it is reviewing its flights from Jeju to Shanghai and Xian and preemptively restricted bookings to avoid disruptions.

Spring Airlines Co., China’s biggest budget carrier, canceled flights from Ningbo to Jeju March 15 through 26, and a spokesman said it was due to “changing market conditions.”

Jeju Air, a Korean low-cost operator, said the airline’s request for charter flight in March to Ordos in Inner Mongolia was rejected by the Chinese authorities.

Travel curbs imposed by China on mainlanders with plans for a vacation in South Korea are likely to cut revenue at airlines, travel agencies, package tour operators and cruises by about $5 billion, according to estimates by Goldman Sachs Group Inc.

The China National Tourism Administration verbally ordered local travel agencies to stop selling tours to South Korea starting March 15, the state-run Korea Tourism Organization said last week.

More than 8 million Chinese visited South Korea last year and Chinese make up 85 percent of tourists to the resort island of Jeju.

Some sea-cruise operators are also pulling back. Royal Caribbean Cruises Ltd. said Thursday on its Chinese website that it will cancel port calls to South Korea and replace them with some in Japan for vessels that sail as early as March 17.

Costa Cruises, controlled by Carnival Corp., is also scrapping calls to South Korean ports and re-routing them to Japan.

China is concerned that the U.S. missile shield — called Thaad — will alter the balance of power in the region, and is lashing out by squeezing South Korean businesses on its soil and by discouraging citizens from traveling to popular tourist destinations such as Jeju Island. The Lotte Group, the Korean conglomerate that offered land to house Thaad, said this week that as many as 55 of its retail stores in China were suspended.

The U.S. military said this week that the Terminal High Altitude Area Defense system was aimed solely at defending Seoul against potential missile attacks by North Korea.

Spring Air’s spokesman said tourism and airlines should be “markedly affected” by the ongoing situation between China and South Korea, adding the carrier’s schedule after March 26, when the summer-autumn flight season kicks off, will be adjusted accordingly.


However, the stoppage of services wasn’t widespread. China Eastern Airlines Corp. said ticket sales to South Korea remain normal.

In response to the shuttering of Lotte Mart’s businesses in China, the foreign ministry in Beijing said Monday that the government welcomes “the investment and operation of foreign companies” and protects their “lawful rights and interests in accordance with the law, as long as their businesses abide by laws and regulations.”

South Korean Trade Minister Joo Hyung-hwan said March 5, he was “deeply concerned about the measures taken in China,” and that the government will seek recourse in international law should China violate its trade commitments.

CHINA: Organized Trips To South Korea Outlawed By Chinese Government

Starting this month, Chinese citizens wishing to travel to South Korea will not be able to book trips through travel agencies, according to media reports.

Thought to be a response to Korea’s planned deployment of a US missile defense system, the measure could inflict severe financial damage.

Multiple media outlets have reported that the China National Tourism Administration (CNTA) held an official meeting with Beijing tour operators on Thursday to inform them of the new directive.

Operators have been told to clear all the pre-purchased tours on sale by March 15, or face fines, and even potential closure.

Wang Ki-young, a director at South Korea’s culture ministry, which was forced to convene an emergency meeting said the ban will initially target travel agencies located in Beijing before being rolled out across the country.

China has not officially confirmed its plans but has indirectly hinted that relations between the two Asian nations are suffering due to plans to build THAAD - Terminal High Altitude Area Defense – a multi-billion defense system that includes a powerful radar, and a launcher capable of intercepting ballistic missiles in mid-air.

"Rather than making speculations out of thin air or filling oneself with suspicions, it is better to heed the voice of the people and take effective measures to avoid affecting China-Korea relations and bilateral exchanges and cooperation," foreign ministry spokesman Geng Shuang said in Beijing, when asked about the connection between the rumors and THAAD.

According to the Korea Tourism Organization (KTO), just over 8 million Chinese citizens visited the country last year, comprising nearly half of the entire tourist total. Seventy percent of those came on just the type of organized trips that have now been outlawed.

The visitors spent more than $7 billion in duty-free shops alone, and the KTO believes that even a 50 percent fall in the number of tourists will lead to an annual loss of $10 billion for South Korea’s tourist industry.

“We cannot find any good ideas against the Chinese government's moves,”admitted a duty-free official.

The deployment of THAAD was approved by Seoul last year, before the outbreak of current political tensions, and remains official policy.

While the ruling party is still in favor of the missile defense system, the opposition Democratic Party, which tops the polls, has advocated postponing the implementation until after the next election, or even putting it off altogether, if a compromise needs to be found with China.

With its recent missile tests, North Korea remains a wildcard, and Seoul insists that THAAD is a defensive measure targeted at Pyongyang and not Beijing.

Nonetheless, Beijing officials have been relentless in their criticism of the proposal, which they see as a major intrusion into their sphere of influence by the United States.

With no official sanctions approved, there have been dozens of steps taken by Chinese officials that appear hostile to South Korea.

Most visibly, South Korean artists have reportedly been denied entry visas, its cosmetics have been stopped by customs officials, while five prominent Korean shows have been taken off air, and removed from streaming sites.

Lotte, the South Korean conglomerate that agreed to free up land for THAAD - which has retail 150 branches in China – has been under what has been construed as legal pressure, subjected to frequent health inspections, and denials of construction permits.

“Lotte stands to lose Chinese customers and the Chinese market. That would be a very large slice out of their business pie. The right decision would be for Lotte to defer or reject the THAAD deal,” warned Chinese state agency Xinhua in an editorial last month.

About 40 percent of South Korea’s exports go to China, a number that amounted to $124 billion last year. China exports less to Korea, both in absolute terms, and in relative ones, than vice versa, as it is a much bigger economy, meaning that it can absorb any trade war more easily.

SOUTH KOREA: 910,000 Chinese Tourists Visited South Korea

The number of Chinese tourists in South Korea is on a steady rise despite a diplomatic standoff between Seoul and Beijing over the deployment of an advanced U.S. missile defense system on the peninsula.

According to the Korea Tourism Organization (KTO), a total of 910,000 Chinese people visited South Korea in July, up 32 percent from the same month in 2014. It marks a monthly high in the number of Chinese travelers here.

Last year, South Korea's tour industry was hit hard by the spread of the MERS viral respiratory disease.

Especially, an estimated 1.02 million Chinese people traveled to South Korea for five weeks until Aug. 10 from July 8, when South Korea announced a plan to let the U.S. deploy the Terminal High-Altitude Area Defense (THAAD) system on its soil.

It is a 15.9% rise from the 881,000 recorded between June 4 and July 7.

Meanwhile, the number of foreign visitors to South Korea in the first seven months of 2016 jumped 23% to 9.8 million, compared with 2014. Among them, 4.73 million were Chinese, up 41% from 2014.