THAAD is bad for business

Chinese people can vote with their feet to pressure any company that facilitates a security threat

'No THAAD! Lotte out of China!"

These were the words written on a banner recently held by a group of protesters in front of a Lotte-invested supermarket in the city of Qidong, Jiangsu province.

Protests were organized after Lotte Group, a business conglomerate headquartered in South Korea, accepted a plot of land in exchange for its Skyhill Golf Course in Seongju where the US Terminal High Altitude Area Defense anti-missile system will be deployed, a move that China strongly opposes because it will destabilize the strategic balance in East Asia in favor of the United States.

Does this remind you of a similar protest last year? In July, after an arbitration tribunal passed a biased verdict in support of the Philippines and against China in a dispute involving the South China Sea, groups of angry people in Hebei province blocked the doors to some KFC outlets and shouted slogans such as "Foreign brand out of China!"

Yet the two demonstrations have evoked different reactions. While many media outlets called the demonstrations against KFC "foolish", quite a few people support the protests against Lotte.

So what is the difference between the two?

KFC has seldom shown interest in international relations. It didn't say anything about the South China Sea maritime dispute and had no relationship with the arbitration tribunal. Therefore, the people protesting against KFC had little knowledge about the real world and were demanding that foreign brands be boycotted at random.

But Lotte's case is different. Intentionally or otherwise, it has become part of a military arrangement that poses a potential threat to China. The Chinese government, which supports the rule of law and a market economy, won't retaliate against Lotte, but the Chinese people retain the right to vote with their feet to put pressure on any company associated with a threat to their security.

Moreover, the tactics adopted by the anti-KFC and anti-Lotte protesters were different. Those protesting KFC blocked doors and asked diners to leave their food and walk out, which is a violation of individual rights. There are no reports suggesting the anti-Lotte protesters have used such tactics. Instead, many of them have gone online to say they respect other people's choice to continue buying Lotte's goods and services.

Some people, though, have defended Lotte, saying the company faced immense pressure in South Korea and would have suffered heavy losses in the country had it rejected the government's swap deal. But such a defense is untenable, as THAAD remains a controversial issue, even among South Koreans.

Many South Koreans know that THAAD does not guarantee as much security to their country as good relations with neighbors do. So Lotte might not have suffered huge losses in the domestic market if it had rejected the deal.

And even if some consumers in South Korea boycotted Lotte goods and services, the Chinese market could have covered the resulting losses. Lotte has more than 120 shopping complexes in China, and its total revenue has increased sevenfold in seven years - reaching 3.2 trillion South Korean won ($2.8 billion; 2.6 billion euros; 2.3 billion). In the first quarter of 2016, Chinese consumers spent 942 billion won at Lotte stores, accounting for 70.8 percent of the company's revenue worldwide, more than three times that from South Korea.

Lotte's final decision shows it does not care enough about the Chinese market, and may actually harm itself.

The author is a writer with China Daily. zhangzhouxiang@chinadaily.com.cn

(China Daily European Weekly 03/17/2017 page11)