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THAADChina's economic retaliation by Korea's Thaad deployment
엄주아 기자 | 승인 2017.05.17 |(508호)

Nowadays, not only in Korea, but also in China and USA, there is a controversy about Korea's THAAD deployment problem. Terminal High Altitude Area Defense, formerly THAAD, is a United States Army anti-ballistic missile system which is designed to shoot down short, medium, and intermediate range ballistic missiles in their terminal phase using a hit-to-kill approach. Thaad was developed to counter Iraq's Scud missile attacks during the Gulf War in 1991. The missile carries no warhead, but relies on the kinetic energy of impact to destroy the incoming missile. A kinetic energy hit minimizes the risk of exploding conventional warhead ballistic missiles, and nuclear tipped ballistic missiles will not detonate upon a kinetic energy hit. Originally a US Army program, Thaad has come under the umbrella of the Missile Defense Agency. The Navy has a similar program, the sea-based Aegis Ballistic Missile Defense System, which now has a land component as well ("Aegis ashore"). Thaad system is being designed, built, and integrated by Lockheed Martin Space Systems acting as prime contractor.

So, We looked at Thaad. What is the reason the Pros and Cons of Thaad?

A supporting argument

①Existing Best Missile Defense System ②Electromagnetic waves and noise problems are exaggerated ③Respect for ROK-US Agreements Thaad cost US full charge

An opposite view/counterargument

①Performance limitations ②Opposition of the Sad placement area ③Thaad deployment cost transfer possibility China’s retaliation

According to the argument, First is that Thaad is the best existing missile defense system. Thaad has the highest accuracy rate among the existing missile defense systems. Second, there is a opinion that the radar of Thaad is harmless to the civilian population. The noise problem of the generator is also that there is little noise to the residents because the generator is operated only in the emergency and the commercial electricity is usually used. Finally, respect for the ROK-US agreement and the cost of Thaad. It has already been agreed that both Thaad deployment cost and Thaad operation cost will be borne entirely by the United States. There is little cost to deploy Thaad because it is not simply to produce additional Thaad, but simply to move Thaad forces, which had been operating long ago in the US mainland, to the Korean peninsula. And if Thaad refuses to defend US forces in Korea, the USFK will no longer be able to stay on the peninsula and the foundation of the ROK-US alliance will shake.

According to the argument, there is an objection to the limit of Thaad performance first. Secondly, there is no official data proving the harmfulness of Thaad electromagnetic wave right now. However, as dangers can be revealed at any time, opposition is occurring in areas where Thaad can be located. Third, there is already a consensus that both the deployment cost and Thaad operation costs are all borne by the United States, but there is a possibility that the US, led by Donald Trump, might overturn the existing agreement and put the cost on Korea. Finally, it is Korean retaliation in China.

The controversy began in June 2014 when Curtis Scaparrotti, Commander of the United States Forces Korea, issued a statement to the US Department of Defense asking for the deployment of Thaad to Korea, triggering a heated debate in Korean society. It was the first time that a senior US government official or military official publicly referred to Thaad placement on the Korea Peninsula. When the US government and military officials tried to publicize Thaad issue, the Korean government repeatedly denied it. However, Defense Minister Ashton Carter, who visited Korea in April 2015, seemed to be shaky, saying it was not the time to discuss Thaad deployment. However, after the US government and military officials continued to say the words of Thaad, North Korea's nuclear test in 2016 as a sensitive issue was raised in the wake of. The South Korean government has maintained a strategic ambiguity when it comes to Thaad controversy, officially saying, “Because there was no US request, there was no consultation or decision.”

However, the story broke down again as the president spoke at the New Year's press conference on January 13, 2016, saying that she would review Thaad deployment according to security and national interest. In addition, the ROK and US officials began a formal consultation on Thaad deployment in February 2016, and then announced on July 8 that they decided to deploy Thaad to the USFK in response to North Korea's nuclear and missile threats. On the 13th, they announced Sungju, Kyungbuk Province, as Thaad placement area. The reason that the US and the South Korean military authorities decided to deploy Thaad as a place to locate the Gyeongbuk Sungju was not military effectiveness, population density, and minimization of Chinese opposition.

On November 16, the Ministry of National Defense and Lotte agreed on a site exchange (Namyangju military site - Sungju golf course) for Thaad deployment and signed a site exchange contract on February 28, 2017. And on March 7, 2017, the US military authorities officially announced the start of Thaad placement on the Korea Peninsula.

As Korea and the United States reached an agreement on the issue of Thaad placement, the inter-Korean friction became increasingly serious. So China is strongly opposed to the introduction of Thaad and is retaliating economically. On Feb. 27, 2017, Lotte Group strongly criticized the South Korean government for offering its golf course as Thaad placement site. China's economic retaliation towards Korea has begun. Chinese travel agents' closure of travel products in Korea and ban on the purchase of Korean goods in China are typical examples. In addition, there was a boom in development due to the contract destruction of Korean entertainers in China, restrictions on imports of Korean Wave content, and the development of Jeju Island as well as simple tourism and real estate investment. The boom in the real estate market has also been slashed. And as Chinese tourists, who spend the most money in Myeongdong, disappear, the tourism industry has suffered a great deal of decline in sales.

But as time passed, other results soon began to emerge. As the boycott of Lotte Mart, which provided Thaad site in China, is widespread, suppliers are worried about the withdrawal of Lotte Mart. If the Lotte company withdraws from China, 100,000 Chinese will become unemployed. And as Chinese tourists disappeared, many tourists from Japan, Malaysia, Thailand, and other countries began to be appeared in Myoungdong and Jeju Island. In conclusion, when Korea-China economic conflict grows, China also feels a great burden.

As the situation is progressing, experts say that China needs to reorganize its export structure in a way that lowers its dependence on tourism and trade, which is high for China, and diversifies trading partners. For example, Taiwan, Norway, Japan. All three countries were once very reliant on China, but they were building stronger and equal diplomatic relations, centering on the diversification of economic damages they had received every time the relations with China deteriorated. Resolving economic sanctions from China, initiated by rebellion by Thaad deployment, in cooperation with the United States, can also be a solution. However, Korea should provide its own solution. Even if there is no Thaad deployment, the higher the dependence of the domestic economy on China, the more likely it is that the situation will be difficult to predict. The diversification of the trading market and the balance with China in a flexible manner should be the targets of the Chinese economic measures.

엄주아 기자  jua_ooo@hwangryong.com

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