China is considering steps such as limiting imports of South Korean goods and services as it seeks to apply pressure on Seoul not to deploy a US missile shield system, according to people familiar with the matter.
Authorities are also considering the suspension of some investments and acquisitions in South Korea, the people said.
China is also assessing the impact of steps already taken on visas and in the entertainment and tourism sectors, they said.
The Chinese government has yet to decide what, or whether, additional measures should be taken, the people said.
The nations have been at odds ever since South Korea agreed to deploy the US’ Terminal High-Altitude Area Defense system (THAAD) on its soil.
Relations that only recently were hailed by both nations as the best in history — China is by far South Korea’s biggest trading partner — have soured, with China’s planned review of trade and investment ties highlighting the potential economic fallout from the THAAD deployment.
Another step Chinese authorities are considering is the exclusion of South Korean makers of batteries for electric vehicles from a list of suppliers that meet China’s technical standards, according to the people.
Samsung SDI Co and LG Chem Ltd are among foreign battery makers not currently on that list.
Chinese automakers, such as Anhui Jianghuai Automobile Co (安徽江淮汽車), have stopped producing cars that use Samsung batteries over concerns they might be stuck with unsold stock if those models are disqualified from government subsidies because their battery suppliers do not qualify.
The Chinese Ministry of Foreign Affairs last week said that THAAD’s powerful radars threaten China’s national security and warned about taking “necessary measures to safeguard” its interests.
This view has been compounded by South Korea showing willingness to share information collected from THAAD with Japan.
Against the backdrop of the tensions, North Asian buyout firm MBK Partners has delayed by a week the final bid deadline in its sale of ING Life Insurance Korea Ltd, according to people with knowledge of the matter.
Some Chinese suitors needed more time to work on the terms of their offers, the people said, asking not to be identified because the talks are private.
Binding bids for MBK’s controlling stake in the business, which could fetch about US$3 billion, had been due yesterday, the people said.
Shares of some South Korean companies that rely on Chinese demand have fluctuated amid strained diplomatic relations between the two nations.
The Korea International Trade Association, an influential business lobby group, has identified 26 measures already imposed by China that hurt its members.
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