Analysis of the THAAD Plan's Effects on Businesses in South Korea

This report examines the multifaceted effects of the Terminal High Altitude Area Defense (THAAD) plan on businesses, particularly in South Korea. The deployment of the THAAD system has triggered an economic boycott from China, impacting South Korean businesses through boycotts, restrictions, and project suspensions. The report highlights economic issues, such as the targeting of the Lotte conglomerate, and political issues, including the Chinese government's control over consumer behavior. It also considers the context of North Korea's nuclear weapons program. The report concludes by noting the potential for negotiation between President Trump and the Chinese premier to resolve these issues and the subsequent implications for Korean firms. The analysis underscores the complex interplay of geopolitical tensions and business operations in the region.

the thaad plan
Effects on businesses

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Table of Contents
INTRODUCTION.......................................................................................................................................2
THE THAAD PLAN...................................................................................................................................2
EFFECTS OF THAAD PLAN ON BUSINESSES.....................................................................................2
U.S. SETTING UP OF THE TERMINAL HIGH ALTITUDE AREA DEFENSE SYSTEM IN SOUTH
KOREA.......................................................................................................................................................2
ECONOMIC ISSUES..............................................................................................................................3
POLITICAL ISSUES..............................................................................................................................3
NORTH KOREA INVESTING IN NUCLEAR WEAPONS......................................................................4
CONCLUSION...........................................................................................................................................4
References...................................................................................................................................................5

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INTRODUCTION
In this paper we are going to study various current political, legal, economical, and technical
contemporary issues that are found in management and in business. We have been plagued by
uncertainty until we began considering the situation going on in the Asian-Pacific.
THE THAAD PLAN
As most of us may already know, President Donald Trump has been granted permission to store
tactical defense missiles in South Korea to protect the United States from the irrational actions of
the North Korean Providence. The plan is called Thaad and it has enraged some South Korean
citizens.
EFFECTS OF THAAD PLAN ON BUSINESSES
One country that is extremely opposed to the idea is China, and they have issued an economic
boycott on South Korean businesses. During the deployment of Thaad, China heavily advised
against the decision, saying it would punish businesses associated with South Korea to make its
point clear. Despite the threats, the decision to withdrawal the tactical missiles were rejected and
China went after some prominent businesses in its region.
U.S. SETTING UP OF THE TERMINAL HIGH ALTITUDE AREA
DEFENSE SYSTEM IN SOUTH KOREA
The U.S. setting up of the Terminal High Altitude Area Defense system in South Korea has
indeed angered China and it has embarked on an economic war against them. Chinese citizens
have begun boycotting South Korean businesses, opposed tourism and even denied entry to a

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famous K-pop group. Chinese government controlled media has only fueled this even more by
applauding the protests. This would certainly hurt South Korea since “China is Seoul's largest
trading partner, receiving one-quarter of South Korea's exports.”
ECONOMIC ISSUES
One Korean conglomerate that gave up land for the THAAD system has been especially
targeted, and 23 Lotte Mart stores in China are being shut down left and right. Chinese
companies have also gotten behind the Chinese government and denied several services to Lotte
industries around China. Also, a $2.6 billion theme-park project in northeastern China” was also
suspiciously suspended under safety charges. In total, Lotte has invested $9 billion on the
Chinese market over the years. The drastic measure the Chinese government took against the
Lotte Conglomerate almost right away should be very intimidating to any business seeking
ventures in China.
POLITICAL ISSUES
The Chinese government outright temporarily ignored 26,000 jobs and still had the support of its
people. Such a governance is very authoritative since at its very basis it is a communist entity.
The politicians in China know how to control the people and how to twist their views. A business
depends on the consumer, and if government controls the consumer one’s true focus should be
the puppeteer. If the government doesn’t like the company, it is impossible to make business
there. Making business in a country with such a government and a people with such nationalistic
feelings is dangerous and it is an issue in management to take such a risk into going into a
market such as that.

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NORTH KOREA INVESTING IN NUCLEAR WEAPONS
North Korea over the past decade, has been investing heavily in their nuclear weapons
department. Recently, they have been conducting hundreds of tests and each missile is becoming
more advanced than the last. Countries have taken extreme caution when confronting North
Korea with their concerns.
CONCLUSION
Due to these increased tensions on economic as well as political front by China and its negative
impact on businesses, Donald Trump is now planning to make a move. And it has been reported
that this coming week President Trump will go to China to negotiate with the Chinese premier to
resolve this issue, and whatever results comes out of there will greatly impact what managers of
Korean firms should do from now on. We will for sure look into more on that angle of this topic
soon.

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References
http://www.businessinsider.com/china-south-korea-economic-boycott-protests-over-thaad-
missile-system-2017-3
https://www.washingtonpost.com/news/josh-rogin/wp/2017/03/29/will-trump-stand-up-for-
south-korea-with-chinas-xi-jinping/?utm_term=.2013142a66be