Company's business in China will take a hit: expert
South Korea's fifth-largest conglomerate Lotte Group is expected to sign a land-swap deal with the South Korean government at the end of February to "exchange the company's golf course with land owned by the South Korean military for the deployment of the advanced U.S. missile defense system THAAD," a source close to the matter told the Global Times over the weekend.
Lotte's golf course is located in the Seongiu region. In its stead, the company will receive government-owned land in Gyeonggi-do Namyangju, the source said.
Land valuation has been completed, the source said. He also noted that once the deal is signed, the South Korean government will speed up deploying THAAD, which could change the geopolitical situation on the Korean Peninsula and harm China's strategic and security interests.
The deal came as Chinese Foreign Minister Wang Yi met with his South Korean counterpart Yun Byung-se at the Munich Security Conference in Germany on Saturday. During the conference, Wang voiced China's opposition to THAAD, stressing that "the security of a country should not be achieved at the expense of the security of others" and urging respect from South Korea, China Central Television reported.
Analysts said that Lotte's business in China would take a hit if the land-swap took place.
Since entering the Chinese market in 1994, Lotte has opened more than 100 supermarkets and five department stores in 24 provinces and municipalities, according to a statement on its website. Meanwhile, duty-free stores in Seoul, capital of South Korea, earn 70 percent of their revenue from Chinese tourists.
Lü Chao, a researcher with the Liaoning Academy of Social Sciences, said that the northeastern region was an example.
"Lotte has been one of the most popular South Korean firms in that region, thanks to some local governments' support policy and its business concepts, which are close to local consumers' lifestyle," Lü told the Global Times on Sunday.
But the Lotte's deal with the South Korean government will change things, Lü said. "As an influential consortium, the company could have determined the land use itself and rejected the government's request, but now it has stood against China and igniting anger among the Chinese public."
In China's social media platforms like Weibo, a topic titled "boycott Lotte" has been generated. A netizen named Yuedongxinqing listed all member companies of Lotte and called for a boycott against the brand. "Apparently, the company has made a choice between Chinese consumers and the South Korean government, so why are we hesitating and not fighting back?"
"We are going to make its Chinese stores go bankrupt and withdraw from our country," he said in his Weibo account on Sunday.
On February 8, the construction work at a multi-billion dollar real estate project operated by Lotte in Shenyang, Northeast China's Liaoning Province, was halted by Chinese regulators after a fire inspection, Reuters reported.
