Tag Archives: South Korea

Mike Pence to tour Asia next month amid security crises

U.S. Vice President Mike Pence speaks about the American Health Care Act during a visit to the Harshaw-Trane Parts and Distribution Center in Louisville, Kentucky, U.S

JAKARTA (Reuters) -U.S. Vice President Mike Pence will visit Japan and Indonesia as part of an Asian tour next month, sources said on Monday, amid concerns the Trump administration is rolling back Barack Obama’s “pivot to Asia.”

U.S. President Donald Trump has already withdrawn from the Trans-Pacific Partnership (TPP) trade agreement, which was seen as an economic pillar of the strategy.

A Trump administration official told Reuters: “The vice president is going to Asia next month I believe.”

The tour will include South Korea and Australia, the Nikkei Asian Review reported, with North Korea’s missile and nuclear programs and South Korea’s political crisis likely topics for discussion.

China has been infuriated by South Korea’s plan to deploy a U.S. missile defense system targeted at the North Korean threat. South Korea is also going through political turmoil after a court removed President Park Geun-hye from office over a graft scandal.

Pence is also expected to visit Tokyo for a U.S.-Japan economic dialogue, according to a source familiar with the matter.

The visit will come as North Korea’s latest missile launches and the assassination in Malaysia of North Korean leader Kim Jong Un’s estranged half-brother add urgency to the region’s security.

It will also follow this month’s trip by U.S. Secretary of State Rex Tillerson to Japan, South Korea, and China.

The TPP had been the main economic pillar of the Obama administration’s pivot to the Asia-Pacific region in the face of a fast-rising China.

Proponents of the pact have expressed concerns that abandoning the project, which took years to negotiate, could strengthen China’s economic hand in the region at the expense of the United States.

Indonesia’s chief security minister said Pence would meet President Joko Widodo to discuss terrorism and other security issues.

Indonesia has the world’s largest Muslim population and has recently grappled with a series of low-level militant attacks inspired by Islamic State.

“We discussed the planned visit of U.S. vice president Mike Pence to Indonesia and the strategic problems that can be on the agenda to discuss with our president,” chief security minister Wiranto told reporters after meeting the U.S. ambassador to Jakarta.

He added that no dates have been finalized.

In Indonesia, Pence is also expected to discuss a brewing contract dispute between the government and American mining group Freeport McMoRan Inc, said two Indonesian government sources.

Freeport has threatened to take the Indonesian government to court over newly revised mining regulations that have prompted a major scale-back in its operations in the eastern province of Papua.

(Reporting by Agustinus Beo Da Costa and Kanupriya Kapoor; Additional reporting by Malcolm Foster in Tokyo and David Brunnstrom in Washington; Writing by Kanupriya Kapoor; Editing by Nick Macfie and Jeffrey Benkoe)

Cruise control: China squeezes South Korea as boats and planes stay away

A Royal Caribbean cruise is seen at a port in Dalian, Liaoning province, China, July 20, 2017. Picture taken July 20, 2017. REUTERS/Stringer

By Adam Jourdan and Cynthia Kim

SHANGHAI/SEOUL (Reuters) – Pressure in China on travel firms forced airlines and cruise operators to cut routes to South Korea, as the fallout spread on Friday from a diplomatic row over Seoul’s plans to deploy a U.S. missile defense system against Beijing’s objections.

China Eastern Airlines Corp Ltd <600115.SS> and Spring Airlines Co Ltd <601021.SS> stopped offering flights on their websites between the eastern Chinese city of Ningbo and popular South Korean tourist island Jeju from next week.

Korea’s Eastar Jet said it was halting flights between the South Korean cities of Cheongju and tourist hotspot Jeju with various Chinese cities including Ningbo, Jinjiang and Harbin.

This followed Carnival Corp’s <CCL.N> Costa Cruises and Royal Caribbean Cruises <RCL.N> cutting South Korean visits by their China ships. Royal Caribbean cited “recent developments regarding the situation in South Korea”.

The moves reflect a more aggressive and blatant stance against South Korean business in China, although Beijing has not directly said it is targeting South Korean firms.

An internal South Korean government document seen by Reuters said Chinese authorities gave a “7-point” verbal instruction to travel firms to curtail or ban trips to South Korea.

These included a ban on tour groups visiting South Korea from March 15, cruise ships not being allowed to dock in South Korea ports and a warning that those who violated the guidance would face “severe punishment”.

Reuters could not immediately reach China’s tourism administration for comment. China Eastern and Spring Airlines did not respond to requests for comment.

The crackdown has sent a chill across South Korea’s retail and tourism sectors, which rely heavily on China trade, and prompted South Korea to say it will consider filing a complaint against China to the World Trade Organization.

South Korea sold $124 billion worth of goods and services to China last year, about five times the amount it exported to nearby Japan and double the amount it shipped to its second-biggest overseas market, the United States.

Tourism is a particularly sensitive sector, with official South Korean data showing almost half of the visitors to the country come from China.

Asked about cruise operators cancelling South Korean port visits, an official from South Korea’s Ministry of Trade, Industry and Energy told Reuters the ministry was checking if any WTO rules have been violated.

“If we are to launch a dispute, we still need to make sure if anything has been ordered by Beijing,” the official said.

“RELEVANT DEPARTMENTS”

Political risk analysts said the widespread actions against South Korean firms pointed to centralized coordination.

Princess Cruises, also owned by Carnival, said in a statement on Friday it would remove visits to South Korea from routes after talks with “relevant departments”.

“Due to the current situation, Princess Cruises’ China team has been in close dialogue and prudent discussions with relevant departments,” the firm said. “All routes which involve South Korea have been altered.”

The diplomatic problems with its biggest trade partner have come at a difficult time for South Korea.

On Friday, South Korea’s Constitutional Court removed President Park Geun-hye from office on Friday over a graft scandal involving the country’s conglomerates.

Analysts said the upheaval had given China the opportunity to put pressure on Park’s possible successors to ditch or delay the installation of the U.S. Terminal High Altitude Area Defence (THAAD) missile system.

“I think they’ll keep up this pressure well into the period where we get a new government in South Korea,” said Andrew Gilholm, director of analysis for China and North Asia at risk consultancy Control Risks.

“Possibly the reason they’re pushing so hard is that they are trying to influence whatever policy the next government in Seoul takes.”

Meantime, South Koreans living in China have been advised by business groups to adopt a low profile, while residents and shopkeepers in a Shanghai neighborhood where many South Koreans live told Reuters of a growing sense of anxiety.

“I feel wherever I am people are watching me. On the street, in the car and at restaurants, I don’t feel I can freely speak Korean,” said Seo Lan Kyung, 48, a housewife who said she has been living in China for 18 years.

“I want to keep living here but increasingly there’s a feeling of impending crisis.”

(Additional reporting by Christian Shepherd and Muyu Xu in BEIJING, Alexandra Harney in SHANGHAI, Heekyong Yang and Hyunjoo Jun in SEOUL; Editing by Simon Cameron-Moore)

South Korean court throws president out of office, two die in protest

Protesters supporting South Korean President Park Geun-hye clash with riot policemen near the Constitutional Court in Seoul, South Korea. Kyodo/via REUTERS

By Joyce Lee and Cynthia Kim

SEOUL (Reuters) – South Korea’s Constitutional Court removed President Park Geun-hye from office on Friday over a graft scandal involving the country’s conglomerates at a time of rising tensions with North Korea and China.

The ruling sparked protests from hundreds of her supporters, two of whom were killed in clashes with police outside the court, and a festive rally by those who had demanded her ouster who celebrated justice being served.

“We did it. We the citizens, the sovereign of this country, opened a new chapter in history,” Lee Tae-ho, who leads a movement to oust Park that has held mostly peaceful rallies in downtown involving millions, told a large gathering in Seoul.

Park becomes South Korea’s first democratically elected leader to be forced from office, capping months of paralysis and turmoil over the corruption scandal that also landed the head of the Samsung conglomerate in detention and on trial.

A snap presidential election will be held within 60 days.

She did not appear in court and a spokesman said she would not be making any comment. Nor would she leave the presidential Blue House residence on Friday.

“Park is not leaving the Blue House today,” Blue House spokesman Kim Dong Jo told Reuters.

Park was stripped of her powers after parliament voted to impeach her but has remained in the president’s official compound.

The court’s acting chief judge, Lee Jung-mi, said Park had violated the constitution and law “throughout her term”, and despite the objections of parliament and the media, she had concealed the truth and cracked down on critics.

Park has steadfastly denied any wrongdoing.

The ruling to uphold parliament’s Dec. 9 vote to impeach her marks a dramatic fall from grace of South Korea’s first woman president and daughter of Cold War military dictator Park Chung-hee. Both her parents were assassinated.

Park, 65, no longer has immunity and could now face criminal charges over bribery, extortion and abuse of power in connection with allegations of conspiring with her friend, Choi Soon-sil.

Graphic: Who’s Who in Korea scandal http://fingfx.thomsonreuters.com/gfx/rngs/SOUTHKOREA-POLITICS/010030H812T/SOUTHKOREA-POLITICS.jpg

MARKETS RISE

Prime Minister Hwang Kyo-ahn was appointed acting president and will remain in that post until the election. He called on Park’s supporters and opponents to put their differences aside to prevent deeper division.

“It is time to accept, and close the conflict and confrontation we have suffered,” Hwang said in a televised speech.

A liberal presidential candidate, Moon Jae-in, is leading in opinion polls to succeed Park, with 32 percent in one released on Friday. Hwang, who has not said whether he will seek the presidency, leads among conservatives, none of whom has more than single-digit poll ratings.

“Given Park’s spectacular demise and disarray among conservatives, the presidential contest in May is the liberals’ to lose,” said Yonsei University professor John Delury.

Relations with China and the United States could dominate the coming presidential campaign, after South Korea this month deployed the U.S. THAAD missile defense system in response to North Korea’s stepped up missile and nuclear tests.

Beijing has vigorously protested against the deployment, fearing its radar could see into its missile deployments. China has curbed travel to South Korea and targeted Korean companies operating in the mainland, prompting retaliatory measures from Seoul.

The Seoul market’s benchmark KOSPI index <.KS11> and the won currency <KRW=> rose after the ruling.

The prospect of a new president in the first half of this year instead of prolonged uncertainty would buoy domestic demand as well as the markets, said Trinh Nguyen, senior economist at Natixis in Hong Kong.

“The hope is that this will allow the country to have a new leader that can address long-standing challenges such as labor market reforms and escalated geopolitical tensions,” he said.

Park was accused of colluding with her friend, Choi, and a former presidential aide, both of whom have been on trial, to pressure big businesses to donate to two foundations set up to back her policy initiatives.

The court said Park had “completely hidden the fact of (Choi’s) interference with state affairs”.

Park was also accused of soliciting bribes from the head of the Samsung Group for government favors, including backing a merger of two Samsung affiliates in 2015 that was seen as supporting family succession and control over the country’s largest “chaebol” or conglomerate.

Samsung Group leader Jay Y. Lee has been accused of bribery and embezzlement in connection with the scandal and is in detention. His trial began on Thursday.

He and Samsung have denied wrongdoing.

Graphic: South Korea’s impeachment – http://fingfx.thomsonreuters.com/gfx/rngs/SOUTHKOREA-POLITICS/010030NC1EQ/SOUTHKOREA-POLITICS.jpg

‘COMMON CRIMINAL’

The scandal and verdict have exposed fault lines in a country long divided by Cold War politics.

While Park’s conservative supporters clashed with police outside the court, elsewhere most people welcomed her ouster. A recent poll showed more than 70 percent supported her impeachment.

Hundreds of thousands of people have for months been gathering at peaceful rallies in Seoul every weekend to call for her to step down.

On Friday, hundreds of Park’s supporters, many of them elderly, tried to break through police barricades at the courthouse. Police said one 72-year-old man was taken to hospital with a head injury and died. The circumstances of the second death were being investigated.

Six people were injured, protest organizers said.

Police blocked the main thoroughfare running through downtown Seoul in anticipation of bigger protests.

Park will be making a tragic and untimely departure from the Blue House for the second time in her life.

In 1979, having served as acting first lady after her mother was killed by a bullet meant for her father, she and her two siblings left the presidential compound after their father was killed.

This time, she could end up in jail.

Prosecutors have named Park as an accomplice in two court cases linked to the scandal, suggesting she is likely to be investigated.

North Korean state media wasted little time labeling Park a criminal.

“She had one more year left as ‘president’ but, now she’s been ousted, she will be investigated as a common criminal,” the North’s state KCNA news agency said shortly after the court decision.

Graphic: Falls from grace around the world – http://fingfx.thomsonreuters.com/gfx/rngs/SOUTHKOREA-POLITICS-IMPEACH/0100404008D/SOUTHKOREA-PARK-IMPEACHMENT.jpg

(Additional reporting by Ju-min Park, James Pearson, Heekyong Yang, Jeong Eun Lee, Suyeong Lee and Dahee Kim in SEOUL, Yeganeh Torbati in WASHINGTON; Writing by Robert Birsel and Jack Kim; Editing by Bill Tarrant and Nick Macfie)

U.S. starts deploying anti-missile system in South Korea after defiant North’s latest test

Terminal High Altitude Area Defense (THAAD) interceptors arrive at Osan Air Base in Pyeongtaek, South Korea, in this handout picture provided by the United States Forces Korea

By James Pearson and Ju-min Park

SEOUL (Reuters) – The United States started to deploy the first elements of its advanced anti-missile defense system in South Korea on Tuesday after North Korea’s test of four ballistic missiles, U.S. Pacific Command said, despite angry opposition from China.

The announcement came as North Korean state media said leader Kim Jong Un had personally supervised Monday’s missile launches by an army unit that is positioned to strike U.S. bases in Japan, stepping up threats against Washington as U.S. troops conduct joint military exercises with South Korea.

“Continued provocative actions by North Korea, to include yesterday’s launch of multiple missiles, only confirm the prudence of our alliance decision last year to deploy THAAD to South Korea,” U.S. Pacific Commander Admiral Harry Harris said in a statement, referring to the Terminal High Altitude Area Defense (THAAD) anti-missile system.

The move by the U.S. military is likely to deepen the brewing conflict between South Korea and China, which says the THAAD deployment destroys the regional security balance.

The four ballistic missiles fired by North Korea landed in the sea off Japan’s northwest, angering Seoul and Tokyo, days after Pyongyang promised retaliation over the military drills that it sees as preparation for war.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe discussed the launches by the nuclear-armed North during a phone call on Tuesday.

“Japan and the U.S. confirmed that the latest North Korean missile launches were clearly against U.N. resolutions and a clear provocation against the regional and international community,” Abe told reporters. “(North Korea’s) threat has entered a new phase.”

Trump also spoke to South Korea’s acting President Hwang Kyo-ahn to discuss the North’s missile launches, Hwang’s office said.

“MERCILESSLY RETALIATE”

Reclusive North Korea, which has carried out a series of nuclear and missile tests in defiance of United Nations resolutions, issued a typically robust statement on state news agency KCNA after the missile launches.

“In the hearts of artillerymen … there was burning desire to mercilessly retaliate against the warmongers going ahead with their joint war exercises,” KCNA said.

It said Kim ordered the Korean People’s Army’s Strategic Force “to keep highly alert as required by the grim situation in which an actual war may break out any time, and get fully ready to promptly move, take positions and strike so that it can open fire to annihilate the enemies”.

The missiles North Korea fired on Monday were unlikely to have been intercontinental ballistic missiles (ICBMs), South Korea said, which can reach the United States. They flew on average 1,000 km (620 miles) and reached an altitude of 260 km (160 miles).

Some landed as close as 300 km (190 miles) from Japan’s northwest coast, Japan’s defense minister said earlier.

South Korean military and intelligence officials said on Tuesday the four North Korean missiles appeared to be an upgraded version of the Scud type – Extended-Range Scud.

North Korea is mired in a separate diplomatic row with Malaysia over the killing of Kim’s estranged half-brother at Kuala Lumpur airport last month.

The two countries have expelled each other’s ambassador from their capitals and on Tuesday announced tit-for-tat bans on departures of each other’s nationals, sharply escalating tensions between two countries that, until the killing of Kim Jong Nam, had maintained rare close ties.

DIPLOMATIC STANDOFF

The United States and Japan have requested a United Nations Security Council meeting on the latest North Korean missile launches, which will likely be scheduled for Wednesday, diplomats said.

The planned installation of the U.S. anti-missile defense system has led to a diplomatic standoff between China and South Korea.

Chinese authorities have closed nearly two dozen retail stores of South Korea’s Lotte Group, which approved a land swap with the country’s military last week to allow it to install the system.

On Tuesday, Foreign Ministry spokesman Geng Shuang repeated China’s resolute opposition to THAAD, saying the country would take the steps necessary to protect its security interests.

“The consequences of this are on the shoulders of the United States and South Korea. We again strongly urge the relevant sides to stop the deployment process and not keep going down the wrong path,” he added.

China’s state-run Global Times warned the possibility of war on the Korean peninsula was growing because of the U.S.-South Korean military drills and the North Korean missile launches.

“The Chinese public is angry that Pyongyang’s nuclear program has provided an excuse for Seoul to deploy THAAD,” the tabloid said in an editorial.

“Pyongyang blindly believes nuclear weapons are the greatest guarantee of its national security regardless that the reality is the opposite,” it said.China objects to the THAAD deployment, saying its territory is the target of the system’s far-reaching radar. South Korea and the United States have said the missile system is aimed only at curbing North Korean provocations.

The Yonhap news agency said the THAAD deployment could be completed in one or two months.

(Additional reporting by Daewoung Kim in SEOUL, Kaori Kaneko in TOKYO and Phil Stewart in WASHINGTON, Ben Blanchard in BEIJING; Writing by Jack Kim; Editing by Lincoln Feast)

North Korea fires four missiles toward Japan, angering Tokyo and South Korea

A woman walks past a television broadcasting a news report on North Korea firing ballistic missiles, at a railway station in Seoul, South Korea,

By Ju-min Park and Kaori Kaneko

SEOUL/TOKYO (Reuters) – North Korea fired four ballistic missiles into the sea off Japan’s northwest coast on Monday, angering South Korea and Japan, days after it promised retaliation over U.S.-South Korea military drills it sees as preparation for war.

South Korea’s military said the missiles were unlikely to have been intercontinental ballistic missiles (ICBM), which can reach the United States. They flew on average 1,000 km (620 miles) and reached an altitude of 260 km (160 miles).

Some landed as close as 300 km (190 miles) from Japan’s northwest coast, Japan’s Defence Minister Tomomi Inada said in Tokyo.

The United States and Japan have requested a United Nations Security Council meeting on the launches, which will likely be scheduled for Wednesday, diplomats said.

The U.S. military on Monday left open the possibility of additional launch attempts.

“There were four that landed. There may be a higher number of launches that we’re not commenting on. But four landed and splashed in the Sea of Japan,” Navy Captain Jeff Davis, a Pentagon spokesman, told a news briefing.

Condemning the launches as further “provocative behavior,” White House spokesman Sean Spicer told reporters the United States was taking steps to enhance defense against ballistic missiles, including deployment of a Terminal High Altitude Area Defense (THAAD) battery in South Korea.

South Korea’s acting President Hwang Kyo-ahn said Seoul would swiftly deploy the anti-missile system despite angry objections from China. A U.S. official said the system could be installed far earlier than an original fall target date.

Japan also plans to reinforce its missile defenses and is considering buying either THAAD or building a ground-based version of the Aegis system deployed on warships.

Beefed-up missile defense is among economic and military options being weighed in a White House review of policy toward nuclear-armed North Korea expected to be completed in coming weeks, the official said, speaking on condition of anonymity.

Japanese Prime Minister Shinzo Abe said “strong protests” had been lodged with North Korea, which has carried out a series of nuclear and missile tests in defiance of U.N. resolutions.

“It is an extremely dangerous action,” Abe told parliament.

The missiles were launched from the Tongchang-ri region near North Korea’s border with China, South Korean military spokesman Roh Jae-cheon told a briefing, but said it was too early to say what their relatively low altitude indicated.

U.S. officials, speaking on condition of anonymity, also told Reuters there were no indications so far that North Korea had tested an intercontinental ballistic missile capable of hitting the U.S. mainland.

Shortly before taking office, President Donald Trump tweeted “It won’t happen!” in January after North Korean leader Kim Jong Un said the North was close to testing an ICBM.

“We deplore the continued violation of Security Council resolutions by the Democratic People’s Republic of Korea, including the most recent launches of ballistic missiles. The DPRK leadership should refrain from further provocations and return to full compliance with its international obligations,” U.N. spokesman Farhan Haq said on Monday.

Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing that China, which is holding its annual meeting of the National People’s Congress, had noted North Korea’s action.

“All sides should exercise restraint and not do anything to irritate each other to worsen regional tensions,” Geng said, referring to both the missile launches and U.S.-South Korean military exercises.

JOINT DRILLS

North Korea had threatened to take “strong retaliatory measures” after South Korea and the United States began annual joint military drills on Wednesday that test their defensive readiness against possible aggression from the North.

North Korea criticizes the drills and has previously conducted missile launches to coincide with them.

In a letter to the U.N. Security Council on Monday, North Korea’s U.N. Ambassador Ja Song Nam warned that “the situation on the Korean Peninsula is again inching to the brink of a nuclear war” due to the military drills.

Ja again requested that the Security Council meet to discuss the drills. Previous such requests have gone unanswered by the Security Council. The letter did not mention North Korea’s missile launches on Monday.

Last year, North Korea fired a long-range rocket from Tongchang-ri that put an object into orbit. The United Nations condemned that launch for violating resolutions banning the use of ballistic missile technology.

North Korea test-fired a new type of missile into the sea last month and has said it would continue to launch new strategic weapons.

Trump’s national security team is reviewing a wide range of options to counter the missile threat. But an administration official played down the prospects for any direct military action, such as pre-emptive missile strikes on North Korean launch sites or reintroducing nuclear weapons to South Korea, as highlighted in recent news reports.

Instead, the focus is expected to be on imposing new sanctions on North Korea and pressing China to do more to rein in Pyongyang, the official said. Previous administrations have made similar efforts but have failed to curb North Korea’s nuclear and missile advances.

The United States withdrew nuclear weapons from South Korea in 1991 before the rival Koreas signed a declaration on denuclearization of the peninsula. North Korea walked away from the agreement, citing the threat of invasion by the United States.

North Korea conducted its fifth and most powerful nuclear test last September. State media said after that test Pyongyang had used a nuclear warhead small enough to mount on a ballistic missile.

(Additional reporting by Christine Kim and James Pearson in Seoul, Tim Kelly in Tokyo, Ben Blanchard in Beijing, Phil Stewart, David Brunnstrom and Matt Spetalnick in Washington and Michelle Nichols at the United Nations; Writing by Jack Kim; Editing by James Dalgleish)

China hints at trade war strategy in South Korea standoff

A barbed-wire fence is set up around a golf course owned by Lotte, where the U.S. Terminal High Altitude Area Defense (THAAD) system will be deployed, in Seongju, South Korea, March 1, 2017. Kim Joon-beom/Yonhap via REUTERS

By Adam Jourdan

SHANGHAI (Reuters) – South Korean firms are being squeezed in China, in suspected retaliation for Seoul’s deployment of a U.S. missile defense system, highlighting the tools China can deploy to hit back at the corporate interests of trade partners it disagrees with.

The chill facing Korea Inc, from cosmetics and supermarket chains to autos and tourism, points to a potential risk for American companies, amid a more confrontational stance taken by new U.S. President Donald Trump

In China, state media and grassroots political groups have led angry calls to boycott popular Korean products. Photos on social media and local news websites showed crowds vandalizing a Hyundai Motor Co <005380.KS> car, and some Chinese tourism firms moved to cancel Korean tours.

Beijing is furious over a joint plan by South Korea and the United States to set up the Terminal High Altitude Area Defence (THAAD) missile system in South Korea. Seoul and Washington say it will defend against nuclear-armed North Korean missiles. But Beijing says its far-reaching radar is targeted at China.

The furor echoes protests in 2012 against Japanese firms during a row with Tokyo over disputed islands in the East China Sea. The dispute flared on Monday when Lotte approved a land-swap deal that moved the THAAD system closer to deployment.

On Thursday, Lotte Duty Free, an affiliate of Korean conglomerate Lotte Group, said it had been the target of a suspected Chinese cyber attack.

“What’s happening to Korean companies now is a pretty good playbook for what might happen to U.S. firms over the next year,” said Andrew Gilholm, director of analysis for China and North Asia at risk consultancy Control Risks.

“Rather than the big dramatic trade war, everything goes to hell scenario under Trump, it’s probably more likely to be manifested as regulatory harassment of companies – one of the lower intensity tools for China.”

Korean stocks plunged on Friday, hitting cosmetics giant Amorepacific Corp <090430.KS>, carmaker Hyundai, and airlines Jeju Air Co Ltd <089590.KS>, Korean Air Lines Co Ltd <003490.KS> and Asiana Airlines Inc <020560.KS>.

POLITICAL PRESSURE

Some companies hinted at feeling political pressure to loosen or cut ties with South Korea. Korean media reported China had ordered tour operators in Beijing to stop selling trips to the country.

Three major Chinese tour operators Reuters spoke to, including China Youth Travel Service <600138.SS>, said they were still offering Korean tours. A customer service worker at Tuniu Corp <TOUR.O>, however, said the firm had stopped providing tours to Korea, citing the THAAD controversy. Tuniu did not respond to requests for comment.

Lotte also said searches for its products had been disrupted on major e-commerce platform JD.com Inc <JD.O>, though it did not directly say this was due to diplomatic tensions. JD.com declined to comment.

The CEO of Chinese retailer Jumei.com posted on his official microblog that his firm would no longer sell Lotte products. The firm did not respond to Reuters requests for comment.

“Some retailers have removed Lotte sales channels over the last week as a result of political pressure,” said a senior China-based retail industry executive, asking not to be named because of the sensitivity of the issues.

The Communist Party Youth League at central and local levels also fanned the flames online, calling for consumers not to buy products including cars, cosmetics and electronics.

“We say ‘no’ to Lotte!” the national-level Communist Youth League wrote in a post on its official microblog page.

‘IT’S BEING COORDINATED’

The consumer backlash followed. The number of posts mentioning Lotte’s Chinese name spiked to nearly 300,000 on Thursday from a normal level of a few thousand.

Photos posted on Chinese social media showed a large group of people surrounding a smashed up Hyundai car covered with black graffiti, prompting alarm over a repeat of issues that have hit faced Japanese carmakers. Other posts circulated online called for a blanket ban on all Korean tours.

China’s tourism administration posted a statement about South Korean “travel tips” on Friday, reminding Chinese holiday-makers “to soberly understand the risks of traveling abroad and carefully choose their travel destinations.”

The administration did not comment on any travel ban.

The normally hawkish state-run tabloid Global Times even struck a note of caution on Friday, warning vandalism of Korean products “won’t win the support of mainstream public opinion”.

However, Gilholm added the wide spectrum of measures taken against South Korea was unusually aggressive and authorities – though staying officially on the sidelines – played a role.

“For it to happen nationwide in such a short space of time it’s clearly been coordinated. You don’t see that being announced or admitted, but it’s being coordinated,” he said.

The Global Times warned last November the United States could face such a coordinated campaign. If Donald Trump triggered a trade war with China, Beijing would then target firms from Boeing <BA.N> to Apple <APPL.O> in a “tit-for-tat” approach.

“If Trump wrecks Sino-U.S. trade, a number of U.S. industries will be impaired,” it said in an editorial.

(Additional reporting by Cate Cadell and Xu Muyu in BEIJING, SHANGHAI newsroom. Editing by Bill Tarrant.)

South Korea, U.S. begin large-scale annual drills amid North Korea tension

South Korean policemen and soldiers stand guard at a golf course owned by Lotte, where the U.S. Terminal High Altitude Area Defense (THAAD) system will be deployed, in Seongju, South Korea, March 1, 2017. Kim Joon-beom/Yonhap via REUTERS

SEOUL (Reuters) – South Korean and U.S. troops began large-scale joint military exercise on Wednesday conducted annually to test their defense readiness against the threat from North Korea, which routinely characterizes the drills as preparation for war against it.

The exercise, called Foal Eagle, comes amid heightened tension following the latest test launch of a ballistic missile by the North on Feb. 12 and in the past prompted threats by Pyongyang to launch military action in retaliation.

South Korea’s Defense Ministry and the U.S. military based in the South confirmed the start of the drills on Wednesday that will continue until the end of April but did not immediately provide further details.

The exercise last year involved about 17,000 American troops and more than 300,000 South Koreans.

U.S. Defense Secretary Jim Mattis spoke with South Korean Defense Minister Han Min-Koo early on Wednesday by telephone and said the United States remains steadfast in its commitment to the defense of its ally.

Mattis welcomed a deal signed by South Korea with the Lotte Group conglomerate this week to secure the land to station the Terminal High Altitude Area Defense (THAAD) missile defense system in the South, the two countries said.

South Korea has said it and the United States aim to make the system, which the two countries decided last year to deploy in response to the North Korean missile threat, operational by the end of the year.

Han said in the phone call with Mattis that this year’s joint drills will be conducted at a similar scale as last year’s, which the South’s Defense Ministry had called the “largest-ever” exercises by the allies.

North Korea’s official KCNA news agency said earlier on Wednesday its leader Kim Jong Un inspected the headquarters of a major military unit and issued guidance on increasing combat readiness.

(Reporting by Jack Kim and Ju-min Park in Seoul and Phil Stewart in Washington; Editing by Michael Perry)

China reacts with anger, threats after South Korean missile defense decision

FILE PHOTO: A Terminal High Altitude Area Defense (THAAD) interceptor is launched during a successful intercept test, in this undated handout photo provided by the U.S. Department of Defense, Missile Defense Agency. U.S. Department of Defense, Missile Defense Agency/Handout via Reuters/File Photo

BEIJING (Reuters) – Chinese state media have reacted with anger and boycott threats after the board of an affiliate of South Korea’s Lotte Group approved a land swap with the government that allows authorities to deploy a U.S. missile defense system.

The government decided last year to deploy the U.S. Terminal High Altitude Area Defense (THAAD) system, in response to the North Korean missile threat, on land that is part of a golf course owned by Lotte in the Seongju region, southeast of Seoul.

The board of unlisted Lotte International Co Ltd approved the deal with the government on Monday.

China objects to the deployment in South Korea of the THAAD, which has a powerful radar capable of penetrating Chinese territory, with Beijing saying it is a threat to its security and will do nothing to ease tension with North Korea.

Lotte should be shown the door in China, the influential state-run Chinese tabloid the Global Times said in an editorial on Tuesday.

“We also propose that Chinese society should coordinate voluntarily in expanding restrictions on South Korean cultural goods and entertainment exports to China, and block them when necessary,” it said in its English-language edition.

The paper’s Chinese version said South Korean cars and cellphones should be targeted as well.

“There are loads of substitutes for South Korean cars and cellphones,” it said.

China has already twice issued “solemn representations” to South Korea about the most recent THAAD-related developments, Chinese Foreign Ministry spokesman Geng Shuang told a daily briefing in Beijing.

But it welcomes foreign companies to operate in China, he said. “Whether or not a foreign company can operate successfully in China, in the end is a decision for the Chinese market and consumer,” he added.

Late on Monday, the ruling Communist Party’s official People’s Daily said cutting diplomatic ties should be considered.

“If THAAD is really deployed in South Korea, then China-South Korea relations will face the possibility of getting ready to cut off diplomatic relations,” it said on the WeChat account of its overseas edition.

The official Xinhua news agency also said in a commentary late on Monday that China “did not welcome this kind of Lotte”.

“Chinese consumers can absolutely say no to this kind of company and their goods based on considerations of ‘national security’,” it said.

South Korea’s defence ministry said on Tuesday it had signed a land swap deal, with Lotte exchanging the golf course for military property. A South Korean military official told Reuters the military would begin area patrols and install fences.

The Lotte Group said on Feb. 8 Chinese authorities had stopped construction at a multi-billion dollar real estate project in China after a fire inspection, fuelling concern in South Korea about damage to commercial ties with the world’s second-largest economy.

Asked if South Korea had demanded the Chinese government suspend any economic retaliation, South Korean Defence Ministry spokesman Moon Sang-kyun said: “We have continuously persuaded China so far and will keep continuing efforts to do so.”

South Korean government officials have said THAAD is a defensive measure against North Korean threats and does not target any other country.

South Korea’s central bank said this month the number of Chinese tourists visiting the tourist island of Jeju had fallen 6.7 percent over the Lunar New Year holiday from last year, partly because of China’s “anti-South Korea measures due to the THAAD deployment decision”.

(Reporting by Ben Blanchard; Additional reporting by Ju-min Park in SEOUL; Editing by Paul Tait and Clarence Fernandez)

South Korea suggests North’s suspension from U.N. over airport killing

Yun Byung-se, Minister of Foreign Affairs of South Korea, addresses the Conference on Disarmament at the United Nations in Geneva, Switzerland February 28, 2017. REUTERS/Denis Balibouse

By Stephanie Nebehay and Joseph Sipalan

GENEVA/KUALA LUMPUR (Reuters) – South Korea called for “collective measures” to punish North Korea for using chemical weapons to kill the estranged half-brother of its leader Kim Jong Un, as Malaysia said on Tuesday it would charge two women with murder over the airport attack.

Police have said the women smeared VX nerve agent, a chemical on a United Nations list of banned weapons of mass destruction, on Kim Jong Nam’s face in an assault captured on security cameras in the Malaysian capital’s airport on Feb. 13.

Speaking at the U.N.-backed Conference on Disarmament (CD) in Geneva on Tuesday, South Korea’s Foreign Minister Yun Byung-se said the use of chemical weapons was a “wake-up call” and the international community should act – including possibly suspending the isolated North’s seat at the United Nations.

North Korea has rejected allegations of its involvement in the killing of Kim Jong Nam, but U.S. and South Korean officials believe he was the victim of an assassination orchestrated by Pyongyang.

“Many international media pointed out that North Korea’s use of chemical weapons for the targeted killing in a third country sent a very clear message to the world,” South Korea’s Yun told the Geneva forum.

“Namely this impulsive, unpredictable, trigger-happy and brutal regime is ready and willing to strike anyone, anytime, anywhere.”

North Korea’s delegation at the conference told Reuters it would respond to Yun’s speech later on Tuesday.

Malaysian police arrested a Vietnamese woman, Doan Thi Huong, and an Indonesian, Siti Aishah, in the days after the attack.

Police are also holding one North Korean man and have identified seven other North Koreans wanted in connection with a case that reads like the plot to a spy movie.

Both women will be formally charged on Wednesday under section 302 of the penal code, which carries the death penalty, Malaysia’s attorney general, Mohamed Apandi Ali, confirmed to Reuters in a text message.

DEADLY NERVE AGENT

VX is one of the deadliest chemical weapons ever created, far more potent than Sarin, the gas used in deadly chemical attacks in Syria in 2013 and in an attack on the Tokyo subway by a Japanese doomsday cult in 1995.

“Just a few grams of VX is sufficient for mass killing,” Yun said.

“North Korea is reported to have not just grams but thousands of tonnes of chemical weapons, including VX, all over the country … The recent assassination is a wake-up call to all of us to North Korea’s chemical weapons capability and its intent to actually use them.”

North Korea has previously denied possessing chemical weapons.

States could invoke the Chemical Weapons Convention as the use of such agents was in “flagrant violation of international law”, Yun said. Malaysia is part of the 1993 pact prohibiting their production, transfer and use, but North Korea is not.

Once the Malaysian government releases the results of its investigation, the U.N. Security Council and state parties to the Chemical Weapons Convention should take up the case as a “high priority agenda”, Yun said.

States that have ratified the chemical weapons ban could invoke the treaty and “take collective measures”, he added.

“It could take the form of suspension of North Korea’s rights and privileges as a U.N. member,” he said.

‘REALITY TV PRANK’

Malaysia’s investigation into the killing has sparked diplomatic tension with North Korea, and on Tuesday a high- ranking delegation arrived in Kuala Lumpur from Pyongyang in a bid to smooth ties.

North Korea’s official media has made no mention of Kim Jong Nam, who had been living in exile, under Beijing’s protection, in the Chinese territory of Macau, and had criticised the regime of his family and his half-brother, Kim Jong Un.

But a report last week from the North’s KCNA state news agency blamed Malaysia for the death of one of its citizens there.

Security camera footage, which has been broadcast in the media, showed two women assaulting Kim Jong Nam in the departure hall of Kuala Lumpur International Airport. He died within 20 minutes.

Both of the women arrested have told diplomats from their countries that they had been paid to take part in what they believed was a prank for a reality television show.

Huong, the Vietnamese woman, was detained 48 hours after the murder in the same airport terminal where Kim Jong Nam was killed.

She is believed to be the woman wearing a white shirt emblazoned with the acronym “LOL”, whose image was caught on security cameras while waiting for a taxi after the attack.

The Indonesian woman, Siti Aishah, was detained a day later.

Police have said the women knew what they were doing when they attacked Kim Jong Nam and were instructed to wash their hands afterwards.

Police said Aishah fell sick, vomiting repeatedly while in custody possibly as a side-effect of VX, though Indonesian embassy officials have subsequently said she was in good health.

(Reporting by Stephanie Nebehay in GENEVA, Joseph Sipalan and Angie Teo in KUALA LUMPUR and Zahra Matarani in JAKARTA; Writing by Alex Richardson; Editing by Robert Birsel)

South Korea says North Korean ministries organized assassination in Malaysia

Kim Jong Nam arrives at Beijing airport in Beijing, China, in this photo taken by Kyodo February 11, 2007.

By Ju-min Park

SEOUL (Reuters) – South Korean intelligence believes suspects wanted for the murder of the half-brother of North Korea’s leader included several officials who worked for the reclusive state’s foreign and security ministries, according to lawmakers in Seoul.

Kim Jong Nam was killed earlier this month at a Malaysian airport by assassins using VX nerve agent, a chemical capable of killing in minutes and listed by the United Nations as a weapon of mass destruction.

South Korea is acutely sensitive to developments in its unpredictable nuclear-armed neighbor, and intelligence agency officials have briefed lawmakers on the sensational killing of the estranged half-brother of the North’s leader Kim Jong Un.

North Korea has not acknowledged the victim is Kim Jong Nam. But South Korean and U.S. officials believe Kim, who had criticized his family’s control of the isolated state, was assassinated by agents of the North.

“Among eight suspects in this case four are from the ministry of state security and two who actually took action are from the foreign ministry,” Lee Cheol-woo, one of the lawmakers briefed by South Korean intelligence, told reporters.

“That is why it is a case of terrorism led by the state, directly organized by the ministry of state security and the foreign ministry,” Lee added.

Malaysian police have identified a total of eight North Koreans as suspects or as wanted for questioning. These include a North Korean embassy official believed to still be in Kuala Lumpur.

Malaysia’s health minister Subramaniam Sathasivam said on Sunday that Kim Jong Nam died within 15-20 minutes of being assaulted by two women who are believed to have smeared VX on his face.

He had been at Kuala Lumpur International airport to catch a flight to Macau, the Chinese territory where he had been living under Beijing’s protection.

The women, Indonesian and Vietnamese citizens, are in police custody and have told officials from their respective embassies that they believed they were taking part in a TV prank.

THREE TEAMS

Another South Korean lawmaker briefed by the intelligence agency, Kim Byung-kee, said the North Koreans had operated in three teams.

Two teams, each including officials from both North Korea’s state security and foreign ministries, were responsible for hiring women in Indonesia and Vietnam and bringing them to Malaysia to carry out the attack. The third team provided “support”.

He said South Korean intelligence said the North’s embassy official in Kuala Lumpur, Hyon Kwang Song, was linked to the state security ministry and part of the support team.

Malaysian police have said they may issue an arrest warrant for the diplomat if he does not cooperate, but it is unclear if they can do so given he has diplomatic immunity.

The one North Korean in police custody, Ri Jong Chol, was also believed to have been part of the support team, said Kim Byung-kee.

Malaysian authorities have not commented on the roles that any of the North Koreans played in the killing.

The investigation into the killing, and Malaysia’s refusal to hand over the body to North Korea before it is officially identified by the victim’s next of kin, has caused a diplomatic rift between two hitherto friendly governments.

(Additional reporting by Jack Kim; Writing by Kanupriya Kapoor; Editing by Simon Cameron-Moore)