23 May 2017

News Story: Beijing's new weapon in economic war - Chinese tourists

By Allison JACKSON

Slapping import bans on products like mangoes, coal and salmon has long been China's way of punishing countries that refuse to toe its political line.

But Beijing has shown that it can also hurt others by cutting a lucrative Chinese export: tourists who normally flock to South Korea or Taiwan.

China's recent boycott of South Korea over a US anti-missile shield on the Korean peninsula signals a growing aggression in the way it flexes its economic muscles, analysts say.

Beijing has banned Chinese tour groups from going to the South, hammering its tourist market and the duty-free shops of retail giant Lotte Group, which has been targeted for providing land for the controversial defence system.

Dozens of Lotte stores were closed in China and protests held across the country as Beijing ramped up pressure on Seoul to abandon the Terminal High-Altitude Area Defense (THAAD) system, which it sees as a threat to its own military capability.

Lotte also suffered setbacks in several of its Chinese ventures -- from the government-ordered halt of a $2.6 billion theme park project to apparent cyberattacks on company websites.

"If you don't do what Beijing's political leaders want they will punish you economically," said Shaun Rein, founder of Shanghai-based China Market Research Group.

"They put the economic vise on politicians around the world. They have been doing it for years and it works."

Seoul-based tour operator Korea-China International Tourism has reported an 85 percent drop in tourists in recent months, which its founder attributes to China's anger over THAAD.

The company usually receives 4,000 mostly Chinese visitors a month, but that has fallen to around 500 after Beijing warned tourists about the risks of travelling to the South, and ordered Chinese tour operators to stop sending groups there.

Read the full story at SpaceDaily