China Puts Pressure on South Korea's Economy After THAAD Agreement

South Korea has been under tremendous pressure as tensions increase due to China’s boycott of South Korean products, North Korea firing missiles, and the United States insisting that South Korea increase its defense. Recently, North Korea has been testing ballistic missiles and firing them near Japan and South Korea, and this has many countries concerned with their defense systems. The U.S. argued that Terminal High Altitude Area Defense (THAAD), “an American missile defense system designed to shoot down short and intermediate range missiles in the terminal phase”, was needed in South Korea to protect the country from the North. Therefore, Seoul's government agreed to increase its defense system and install THAAD on its soil.

When China found out about the THAAD agreement, it was outraged and began boycotting the country's products, “affecting everything from South Korean pop stars and television programs to Korean-owned supermarkets”. China protested South Korea’s agreement on THAAD because it was concerned that the missile defense system could track the location of its own missile systems, granting the U.S. strategic advantages. To prevent THAAD from being deployed in South Korea, China has threatened to “cut diplomatic relations with Seoul”, shut down Korean markets and groups in their country, and even ban trade and flights to the country in order to blackmail and hurt South's economy.

Because China is its largest trading partner, South Korea’s dependence on the country is becoming even more evident. South Korea relies heavily on trade and exports which has led to prominent industrial growth in the past. However, the question arises whether South Korea is going to be able to shift away from the old economic model in order to decrease its dependency on other countries, specifically its dependency on China.