China Retaliates Against South Korea for Missile-Defense System, Harms Chinese Workers in the Process

China's President Xi Jinping

China's President Xi Jinping / Getty Images

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Chinese factory workers are suffering from their country's campaign against South Korean consumer goods in retaliation for Seoul's deployment of a missile-defense system to counter North Korea.

Beijing's efforts to punish South Korean industry has harmed Kia factory workers in Yancheng, China, who have had their hours and pay reduced thanks to dropping sales of Korean cars in China, the Wall Street Journal reports. With Kia parent Hyundai Motor Co. seeing Chinese sales collapse by 61 percent from March to June and Yancheng Kia factories operating at 30 percent capacity, workers fear that sweeping layoffs could be next.

"The anti-Korea sentiment damages our own interests," said Sun Nan, a sales manager at a local Kia dealership. "The conflict has a negative impact on both China and Korea."

Beijing Motor Corp. and Dongfeng Motor Corp. are Chinese firms that have partnerships with Hyundai Motor Co., and they stand to lose money if anti-Korean sentiments persist. A Beijing Motor spokesman told the Journal that the company hopes "the difficulties are temporary."

This drop in sales mirrors downward trends in consumption of many other Korean goods in China, even extending to pop music. Consequently, Chinese workers at Kia factories are seeking second jobs.

Falling sales of South Korean goods indicate Chinese consumers are following their government in punishing Seoul regardless of North Korea's bellicosity. North Korean leader Kim Jong-un's regime has continued to advance Pyongyang's nuclear program despite decades-long U.S. pressure to stop developing nuclear weapons.

China publicly claims to support a denuclearized Korean peninsula, but state-run media has nevertheless criticized South Korea for responding to North Korean missile tests by deploying missile defenses. China did, however, support United Nations sanctions against North Korea earlier this month, which U.S. Ambassador to the U.N. Nikki Haley considered a sign of progress.

The U.S. made the missile-defense system—the Terminal High-Altitude Area Defense system, or THAAD—deployed by South Korea, and has consistently defended its allies' rights to defend themselves.

"The United States seeks stability and the peaceful denuclearization of the Korean peninsula. We remain open to negotiations towards that goal," Defense Secretary Jim Mattis, Secretary of State Rex Tillerson, and Director of Intelligence Dan Coats said in a joint statement in April. "However, we remain prepared to defend ourselves and our allies."

Chinese President Xi Jinping has downplayed China's leverage over the Kim regime, even though North Korea relies on China for as much as 90 percent of its foreign trade. The U.S. on Tuesday sanctioned Chinese and Russian companies that have helped the North's nuclear and missile programs.

Yancheng has three Kia factories with another being built, and it has a variety of Korean restaurants, since the city's massive growth in recent years is largely attributable to Korean manufacturing. A local Communist Party official who asked not to be identified said the Kia factories alone account for 30,000 of the city's jobs, and added that the Korean auto industry generates 60 percent of the city's tax revenue.

A Kia spokesman said Chinese production is "operating in line with the current market environment," and declined to discuss the matter further.

Paul Crookston

Paul Crookston   Email Paul | Full Bio | RSS
Paul Crookston is a media analyst with the Washington Free Beacon. He was previously a Collegiate Network fellow at National Review. A 2016 graduate of Gordon College in Wenham, Mass., he served as the managing editor of the Tartan campus newspaper. He is originally from Tampa, Fla., but he still roots for Dad’s Ohio teams. His Twitter handle is @P_Crookston. He can be reached at crookston@freebeacon.com.

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