SOUTH KOREA. Lotte Duty Free has welcomed reports that China will soon lift economic restrictions on Korean firms that were imposed after the THAAD anti-missile system dispute began in March 2017. But the company warned against any premature optimism.
“It is of course welcome news,” a spokesman told The Moodie Davitt Report. “However, we have to wait and see if the backlash will actually be relieved. Judging by the precedents, there might be extra conditions to be added so it is not advisable to be too optimistic yet.”
According to widespread reports in Korean media, Chinese State Councilor Yang Jiechi told Korean President Moon Jae-in in Seoul on Friday that there will be “tangible results in the near future” for an end to Chinese retaliation against South Korea’s deployment of the US anti-missile system. The Lotte Group has borne the brunt of the backlash due to THAAD being sited on company land.
Korea Joongang Daily reported that Yang’s words had raised “cautious hopes” among local retail, tourism and other businesses.
As reported, Chinese arrivals to South Korea fell by -48.3% in 2017 compared with the previous record year. While South Korea’s duty free market still posted a remarkable +20.7% growth last year to an all-time US$12.8 billion high, that result was very much driven by the daigou (shuttle trader) phenomenon that reached new, often frenzied heights.
Note: The Moodie Davitt Report is in Seoul this week to report on how the world’s biggest duty free retail market is shaping up in a constantly evolving political landscape.
