Published: Thu, March 09, 2017
Business | By Patricia Jimenez

China shuts 23 Lotte stores amid missile row

At one Lotte Mart in Jilin province, people holding Maoist posters were seen chanting slogans such as "Say no to THAAD" and "Boycott Korean goods", Agence France-Presse reported.

Lotte Group is bearing the brunt of suspected Chinese wrath at Korea's decision to let the USA station a Terminal High-Altitude Area Defense battery here. As Lotte Group moved to confirm that the stores had been shut down, its executives held an emergency meeting on Sunday to come up with countermeasures, which could include seeking active help from the South Korean government to minimize the damage to Lotte and to many other South Korean companies in China.

A Lotte staffer in China said firefighting authorities conducted a surprise inspection and ordered the immediate closure of the stores.

Some brick-and-mortar Chinese retailers and online shopping platforms have removed everything under the Lotte brand - from cosmetics to candy - from their physical and digital shelves.

South Korea's military earlier today said North Korea fired four ballistic missiles into the sea prompting acting president Hwang Kyo-ahn to call for THAAD's swift installation.

Lotte was quick to denounce the alleged report.

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Outside one store, a red banner with large white characters read: "South Korea's Lotte has declared war on China".

The Lotte's duty free operator, Lotte Duty Free, last Thursday said a cyber attack using Chinese internet protocol (IP) addresses had crashed its website.

Shares of Lotte Confectionery, the unit that runs the Shanghai chocolate-making joint venture, fell 4.2% on Wednesday in Seoul, compared with the benchmark Kospi Index's 0.1% gain.

Lotte Shanghai Foods, a joint venture between the US's Hershey and South Korea's Lotte Group, has been ordered by Chinese authorities to stop production, escalating China's economic retaliation for the deployment of a USA missile defence system in South Korea.

"We will act accordingly to worldwide law against any actions that violate policies of the World Trade Organisation (WTO) or the free trade agreement between South Korea and China", said South Korea Trade Minister Joo Hyung-hwan.

This could hamper the South Korean gaming industry more than what South Korean regulators and branches of their government have already imposed on the industry over the past years, which has ironically driven a few companies into the arms of China.

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