United States has sent a Thaad anti-missile system to South Korea to act as a deterrent to plans of North Korea but, it has landed Seoul in a tight spot because of the adverse effect it has on Tourism. THAAD has no link with tourism as such except that it did not have the blessings of China and the result, as revealed by Korea Tourism Organization, is that Seoul has lost nearly 40% of tourists from China.

The THAAD factor and China

CNN reports that China has opposed the positioning of the THAAD anti-missile system in South Korea. In its opinion, the system threatens security and would escalate tensions in the region.

The Seoul government has explained that the intention of the system was to counter the threat from North Korean missiles.

However, they had not reckoned with the effect that the missile system would have on its tourism and associated businesses. South Korea had nearly 17 million tourists last year, and half of them were from China. Obviously, China is a huge market and the Chinese are big spenders. Therefore, all those in the tourism industry are feeling the pinch because of the drastic drop in the arrival of tourists.

South Korea at the Crossroads

Beijing and Seoul are caught in the trap of THAAD – Seoul is going ahead with the system because necessary equipment has arrived at the planned deployment site as confirmed by the South Korean Defense Ministry and China is determined to safeguard its interests.

To add to the woes of Seoul, authorities in China are believed to have instructed travel agencies to put on hold trips to South Korea. The result is a bleak outlook for tourism with duty-free stores also in the doldrums because Chinese tourists usually translate into a large chunk of duty-free sales.

The burgeoning middle class in China loves to go globetrotting and has spent billions of dollars for traveling abroad last year.

This will increase in future, and there would, naturally, be a clamor from foreign countries to lay hands on a piece of the pie and countries in Southeast Asia are expected to reap the benefits from the problems between South Korea and China.

Tourism is always a money earner, and political compulsions spoil the smooth functioning of this huge industry that generates employment apart from adding to the coffers of the country. Given the current developments, Seoul would have to search for alternate methods to recover losses it suffers from fall in tourism.