China bans tours to S Korea as defence spat worsens

Beijing is banning Chinese tour groups from visiting South Korea, the latest retaliation against the planned Korean deployment of the US-built Thaad missile shield, according to two people with knowledge of the plans.

Wang Ki-young, a director at South Korea’s culture ministry, said on Friday that Chinese authorities had ordered tourism agencies in Beijing to halt tours to South Korea from mid-March. Mr Wang said the move would be expanded to other provinces.

Meanwhile, a salesman from online travel company Tuniu Corp told the Financial Times that it had on Friday “removed all tours to South Korea due to the Thaad issue”. A search for South Korean tours on the website returns the message: “Sorry, we have not found a relevant product.”

Written instructions apparently issued by China’s tourism administration, shown to the FT by one Beijing travel agent, order agencies to cancel group tours to South Korea booked for after March 15 and add that companies not in compliance could be fined or have their licences revoked. The tourism administration was not immediately available for comment.

However, five Beijing-based travel agents said they were still selling South Korea tours for March, as was China’s largest online travel company Ctrip. Representatives at the top three state-owned airline carriers in China told Bloomberg they had not received instructions to halt ticket sales to the country.

Beijing has responded with increasing rancour against Seoul’s decision to deploy Thaad, the Terminal High Altitude Area Defence platform. While South Korea insists the system is for defending itself against North Korean missiles, China fears the technology will allow an ally of the US to spy on its military developments.

“This could be just the beginning,” said Michael Na, a strategist in Seoul with Nomura. “They have so many options to punish Korean businesses.”

He added that “almost every major Korean company, including Hyundai Motor and AmorePacific, relies heavily on Chinese sales”.

Shares in Hyundai and AmorePacific slid on Friday, down 4.4 per cent and 12.5 per cent respectively in late afternoon trading in Seoul.

Several South Korea-linked entities have already felt Beijing’s wrath in response to the Thaad plans. Chinese state news agency Xinhua last month issued a stark warning to Lotte, one of South Korea’s biggest companies, for giving up land on which the Thaad platform will be hosted.

“Lotte will hurt the Chinese people and the consequences could be severe,” said the report, which followed a string of government probes into the company’s business interests in China.

This could be just the beginning. They have so many options to punish Korean businesses

Mr Na said that although South Korea had signed a trade agreement with China, there were plenty of other ways in which Beijing could punish Seoul.

“If they, say, delay a customary process for Korean imports and take other retaliatory measures on Korean products, there is nothing Korea can do about it,” he said.

Chinese tourism to South Korea has boomed in recent years, delighting retailers but irking domestic tourists who have found the country’s attractions swamped with visitors.

There were more than 8m Chinese tourist arrivals in the country last year — up 36 per cent year-on-year, said Mr Wang. The numbers had continued to increase even after Seoul announced the deployment of Thaad, he added.

China’s tourism administration issued a notice on Friday confirming reports that Chinese travellers had been denied entry to South Korea’s Jeju island in recent months for holding incomplete travel documentation. It reminded citizens to “select travel destinations with caution”.

Additional reporting by Tom Hancock in Shanghai