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Chinese tourists shop at a cosmetics store in Seoul’s Myeongdong neighborhood

With China’s fierce resistance to US and South Korean talks about deploying the THAAD (Terminal High Altitude Area Defense) anti-ballistic missile system in South Korea leading to a chill in Beijing’s relations with Seoul, anxiety is increasing at South Korean companies operating in China.

While the Chinese government has yet to take any overt actions, these companies are nervous about when this diplomatic squabble will start shooting off sparks, and where those sparks might land.

“Perhaps because of the socialist tendencies in China, corporations and the private sector respond very sensitively to political factors and moods. Even if the Chinese government authorities have not issued any mandatory directions, there‘s a strong tendency for Chinese companies to go with the flow on their own,” said one source at a South Korean corporation in Beijing that is in the food industry.

“When the government responds negatively to specific countries or corporations, there’s a kind of herd mentality that makes Chinese corporations, consumers and even online opinion all move in that direction.”

“Until just recently, South Korea and China’s relations were quite good, so all of the Chinese that I met were very friendly to me, but now the situation has changed. If things get much worse, I’m really concerned that regulators will become fussy or uncooperative in environmental, labor and sanitary inspections.”

Airlines are also nervous about whether there will be a drop in the number of Chinese tourists visiting South Korea.

“We‘re worried since we’ve never seen a showdown this intense between South Korea and China before. If fewer Chinese come to Korea, we could suffer losses,” said a source at one airline.

Some are concerned that, if the Chinese customs authorities reduce the per capita spending limit for Chinese tourists, companies in the tourism industry could be hit hard.

Companies also appear to be nervous about where Chinese public opinion may be headed.

“We’re monitoring trends in Chinese public opinion,” said a source at one company. “While fortunately there is not as yet any opposition to Korean companies, there’s no telling what the aftermath may be, so we’re keeping a close eye on things.”

Some South Korean companies have even instructed their employees to avoid unnecessary arguments with Chinese organizations and businesspeople as much as possible.

Companies that are in the middle of expanding their options in China also have considerable concerns about these developments.

“If the diplomatic conflict gets worse, we’re pretty worried that the main office in South Korea will take a more conservative approach to running its Chinese business division,” said a source at a company in the restaurant business.

Companies in the areas of cuisine and culture are particularly worried that anti-Korean sentiment will undermine the “Korean Wave.”

Some companies are also keeping an eye on World Consumer Rights Day, which falls on March 15. At 8 pm on that day, China Central Television (CCTV) runs a program called “315 Evening Gala” in which it criticizes companies that have been receiving complaints from customers.

In 2014, Nikon came under fire during the program; in 2013, it was Apple and Volkswagen. In 2011, the program called out a South Korean company, Kumho Tire.

With few if any exceptions, the companies that have been taken to task on “315 Evening Gala” have offered an apology and undertaken a voluntary recall.

“There‘s still a month left, but we’re getting ready for the program on World Consumer Rights Day,” a source at one chaebol said.

By Seong Yeon-cheol, Beijing correspondent

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