China halts construction at major Lotte project amid THAAD tension

Wed Feb 8, 2017 5:51am EST
 
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By Joyce Lee and Hyunjoo Jin

SEOUL (Reuters) - South Korea's Lotte Group said Chinese authorities have halted construction at a multi-billion dollar real estate project after a fire inspection, amid worries in Seoul that Beijing is retaliating against the country's plans to host a U.S. missile defense system.

Separately on Wednesday, Hyundai Motor (005380.KS: Quote) said it may procure electric vehicle batteries from Chinese companies for a planned China model after South Korean battery makers failed to make a list of approved vendors last year.

Beijing is widely believed in South Korea to be discriminating against some of its companies and cancelling performances by Korean artists without explanation.

South Korean media have described a string of inspections at Lotte's Chinese ventures as retaliation over the government's decision to deploy the Terminal High Altitude Area Defence (THAAD) system on land that is currently part of a golf course owned by Lotte, South Korea's fifth-largest conglomerate.

Since December, Chinese authorities have conducted fire inspections, facility inspections or tax investigations at most of Lotte's sites in China including some 120 retail stores, a source with direct knowledge of the matter told Reuters.

The source was not authorized to discuss the matter with media and declined to be identified.

THAAD's powerful radar is capable of penetrating Chinese territory, and Beijing has said THAAD threatens China's own security and will do nothing to ease tension on the Korean peninsula.

Chinese Foreign Ministry spokesman Lu Kang, asked if THAAD had an impact on the Lotte project, told reporters at a daily briefing on Wednesday that he had no understanding of the status of the specific project.   Continued...

 
FILE PHOTO - The logo of Lotte Hotel is seen at a Lotte Hotel in Seoul, South Korea, June 7, 2016.   REUTERS/Kim Hong-Ji/File Photo