China Warned South Korea Lotte Group Amidts Deal With US Defense System

State-controlled Newswire Xinhua of China released on Feb 20 a warning against South Korea's Lotte Group deal with the US Terminal High Altitude Area Defense (THAAD) missile system. This is affecting the economic relations of both countries and possibly inflict military tension in the future.

Lotte Group is South Korea's fifth biggest multinational company and the second largest player of the country's cinema, Variety reported. They received a warning from China amidst its deal with the US Terminal High Altitude Area Defense (THAAD) missile system - the South Korean government's preventive measures to establishing a defense against North Korea.

According to Xinhua, the radar system of the US Terminal High Altitude Area Defense (THAAD) missile system located in South Korea is all-pervading to Chinese territory. Chinese defense ministry sensed this as an act of espionage. Xinhua included a statement that "Lotte Group is one decision away from becoming an accessory to the act."

The official statement released by Xinhua included that the Lotte Group has more to lose as the Chinese market plays a great role in their business. China urged in their warning that the company should take a wise decision to accede and scrap the deal. South Korea must relocate the US Terminal High Altitude Area Defense (THAAD) missile system on a different region of the country where the radar system will not penetrate to Chinese territory.

Lotte Group has over one hundred-fifty branch all over China with eleven multiplexes that have ninety screens. The South Korean cinema company still plans to expand in the region and in fact recently opened one in Hong Kong. With this economic tension, the company already experienced a halt of a $2.9 billion Lotte theme park in Xinyang, China that is still related to the US Terminal High Altitude Area Defense (THAAD) missile system.

Yoo Il-ho, South Korea Finance Minister said in an interview with Quartz, "If China officially takes unfair action against South Korea we would openly move against it, but as long as China says its moves are not related to US Terminal High Altitude Area Defense (THAAD) missile system and rather, local measures at home, the South Korean government cannot accuse China of retaliating." The Xinhua statement, however, only single-handedly target both Lotte Group and the missile system project.