South Korea’s southern resort island of Jeju is a popular destination for Chinese tourists. It is visa-free for them – unlike the rest of the country – and just a one-hour flight from Shanghai and 2-1/2 hours from Beijing. In 2015, it announced plans to build a second airport to accommodate the massive crowds.

But that was before the Chinese government reportedly told Korean tour agencies of plans to cut tourism from China by 20 percent. Then, in December, it rejected applications from Korean airlines to add charter flights between the two countries during the peak travel season of January and February.

Jeju was hit hard. During the week-long Chinese lunar new year holiday, 42,880 Chinese tourists visited, down 16.5 percent from last year's 51,385, according to the island’s tourism association.

The tourism industry is not alone in feeling pressure from Beijing. Since last July, when Seoul announced that it would deploy the American THAAD missile-defense system to protect against North Korea’s growing nuclear threat, China has taken 43 retaliatory actions against South Korea, according to The Korea Institute for National Unification, a government research organization. Those have included everything from blocking imports of cosmetics and electronics to canceling performances by popular Korean entertainers.

During his two-day visit to South Korea last week, US Defense Secretary Jim Mattis agreed to push ahead with the deployment of THAAD, or Terminal High Altitude Area Defense. China views the defense system as part of a broader US strategy to extend its military alliance network from Japan all the way down to the South China Sea. With plans for THAAD's deployment reconfirmed, the institute says Beijing’s retaliation is spilling over into more sectors and turning more aggressive.

"There's a high likelihood of Chinese boycott of South Korea goods or protest rallies against South Korea, caused by nationalist sentiment in China," it told the South Korean news agency Yonhap.

Cai Jian, an associate professor of Korean studies at Fudan University in Shanghai, says China is poised to step up its economic pressure in response to the planned deployment.

“The Chinese government has tried its best to try to persuade the Republic of Korea to reconsider,” he says. “Our response will increase according to the circumstances. We certainly will want them to pay the price.”

Chinese retaliation

South Korea’s Finance Minister Yoo Il-ho said last month that uncertainties linked to China, South Korea's biggest trading partner, could pose a threat to Asia's fourth-largest economy. He’s pledged to investigate whether the charter flight ban, one of "several suspected cases of non-tariff barriers,” was related to the planned THAAD deployment.

China has consistently opposed the decision to deploy the anti-missile system, saying it threatens its own security and will do nothing to ease tension on the Korean peninsula. At a regular news briefing in Beijing on Tuesday, Lu Kang, a spokesman for the Ministry of Foreign Affairs, said “the Chinese side will not alter its firm opposition to the deployment of THAAD.” He also denied allegations of Beijing engaging in indirect economic pressures against South Korea.

“We have never heard of anything like that,” Mr. Lu said. “What we have been doing is urging the relevant parties to call off the deployment so as to avoid further damage to China-South Korea relations.”

Wang Dong, an associate professor of international studies at Peking University, warns that if the deployment goes ahead, China will feel compelled to take strategic steps to defend its national security.

“What China will be compelled to do is readjust its nuclear posture,” he says, suggesting that it may reposition its nuclear arsenal to send a clear signal to South Korea. “If you want to make a deterrence signal very effective, there has to be no ambiguity.”

Turmoil in South Korea

Hwang Kyo-ahn, the acting president of South Korea, has called for a swift deployment, warning that North Korea’s nuclear and missile capabilities are developing at an “unprecedented rate.”

The July agreement called for the deployment to be completed by the end of 2017. But last month, South Korea’s Ministry of National Defense said there could be delays signing a contract to secure the location for it.

Meanwhile, some experts say China could be exploiting political turmoil in South Korea to increase anti-THAAD sentiment in the hopes of persuading the next president to block its deployment.

The South Korea government was thrown into disarray late last year when its parliament voted to impeach President Park Geun-hye on charges of corruption and abuse of power. The motion is now with the Constitutional Court. It’s expected to decide in the coming weeks whether to formally end Ms. Park’s presidency or reinstate her until her term ends next February.

As South Korea prepares for a presidential election that will come no later than December, Beijing has pushed to improve its standing with the opposition Minjoo Party, which opposes the THAAD deployment. Seven Minjoo Party lawmakers visited Beijing in early January to discuss the deployment, following up on a similar trip six lawmakers made to the Chinese capital in August.

Get the Monitor Stories you care about delivered to your inbox. By signing up, you agree to our Privacy Policy

Moon Jae-in, a former leader of the Minjoo Party and the leading presidential hopeful, has said the THAAD deployment should wait until the next South Korean administration is in place. He’s also recommended that the next South Korean leader seek renegotiations with Washington. While Mr. Moon’s more liberal opponents have accused him of flip-flopping, he has maintained a double digit lead in the polls.

"I am demanding neither the enforcement nor the withdrawal of the deployment plan," Mr. Moon said last month, according to the Korea Times. "I am just calling for the issue to be debated by the next government to come up with a rational decision."