The Week After - Business in South Korea

On November 23rd North Korea fired artillery on the South Korean island of Yeonpyeong as a response to South Korea performing military drills near disputed maritime border. Besides the obvious restrictions set on North Korea by global super powers, some businesses are also taking steps to protect their employees from the potential threat.

Tokyo-based Honda, has an office in South Korea and two employees working there. Bloomberg reports a statement from a Honda Spokesman saying, “We halted business trips to the country for today. We will closely watch the situation and decide what we are going to do for tomorrow.” Toyota and Nissan have also suspended travel following Japan’s foreign ministry’s safety alert calling for caution.

The Mainichi Daily News, based in Japan, reports other Japanese firms are just taking a wait-and-see approach. FamilyMart, which owns 5,200 shopping centers, and Fast Retailing, which operates 52 clothing stores in South Korea, believe it “does not warrant a withdrawal of our Japanese staff.”

One interesting dynamic in play is the competition for global market share for high-tech electronics between Japan and South Korea. Although they are fierce competitors, they also depend on each other for specific parts in the electronics they produce.

Airline industry sources are also concerned about the attack’s effects on business and educational tourism. Haneda Airport recently opened an international terminal in October and major airlines are worried about losing their lucrative proceeds. Although major travel agencies have not stopped school trips to South Korea, they would have to stop if the tensions persist.