▲ Terminal High Altitude Area Defense problem between South Korea and China

Duty-free operaters in South Korea faces a crisis as the number of Chinese tourists visiting South Korea decreases a lot since THAAD problem. Trying to deal with the financial problem, lots of duty-free shops are reducing their organizations or employees. THAAD, which means Terminal High Altitude Area Defense, had been a controversial thesis between South Korea and China.

Following South Korea's decision to install an anti-ballistic missile system by America, China prohibited an unofficial travel to South Korea as revenge. Since the profits of duty-free shops had been highly relied on Chinese tourists, many companies are struggling to deal with this problem. "Overall in August, our sales have fallen about 14 percent compared to last year. When looking just at sales from Chinese shoppers, the drop is 28 percent," said an official with Lotte Duty Free. To handle this crisis, lots of companies are reducing its size relaintg to duty-free. Doosan's Doota Duty Free Store and SM Duty Free have reduced not only the size of their stores but also their operating hours to cope with their decreased profits.

According to Hanwha, whose profit loss by THAAD is about 170-million won, cut down its human resources about 40 percent compared to the beginning of the year. "The closure of our outlet in Jeju means that we only have one duty-free store in Seoul", said an official with Hanwha. He added, "We reduced the size of the team to reflect the reduced workload." This is not rlelevant only to duty-free. Airports have been damaged by reducing the number of Chinese tourists which leads to government's hesitating standpoint to decrease investment to Incheon International Airport, which is the largest airport in the world. In addition to, lots of Korean companies in China are also facing with financial problems since China has been suppressed not to utilize Korean brand implicitly. Large corporations who have a branch in China, as well as duty-free department sotres like Lotte, might be assumed to be damaged twice more than other companies. This serious problem does not seem to be resolved until the relationship between South Korea and China will be improved since it is a political problem.