South Korea’s tourism industry is in panic mode with analysts fearing a Chinese tour group ban could cost up to $10 billion in lost tourism revenue.
In retaliation for the planned installation of the THAAD US missile system, the China National Tourism Administration (CNTA) reportedly banned Chinese tour companies from selling tour packages to South Korea.
China has long complained that THAAD, which is to protect the South from an attack by North Korea, also compromises China’s defence systems.
The deployment of the system moved closer last week when land for the system was officially signed off.
Nearly half of all foreign tourists to South Korea are Chinese, and of those about 40% travel on package tours.
Last week Lotte Group reported one of its websites had been hacked just days after it handed over land to be used for the missile defence system.
South Korea officials said the hack was traced back to China.
Responding to the travel ban, the South Korean foreign ministry said: "If such reports are true, it would be an unfair action and very regrettable.
In particular it looks like bad news for Lotte Group, which has 120 retail outlets in China, and in South Korea 70% of its duty free business came from visiting Chinese tourists.
Lotte’s decision has lit a fuse. When foreign firms touch Chinese consumers’ nationalistic feelings, it can spark a boycott," said Peking University professor.
"This will have quite a huge impact on the company."
