Asymmetrical Interdependence and Sanction: China’s Economic Retaliation over South Korea’s THAAD Deployment

Abstract

Since China’s economic rise, there has been an upsurge of cases demonstrating that the country has translated its increasing economic capabilities into political influence over other states. The focus of this paper is to investigate the case of China’s economic sanctions on South Korea in response to its Terminal High Altitude Area Defense (THAAD) deployment. Its goal is to deepen our understanding of how China has employed economic coercion in order to alter the policies of other states. China’s economic sanctions have included intentional ones like the Hallyu ban, a ban on tourism, non-tariff measures, the shutting down of Lotte Marts, and the fomenting of anti-Korean sentiment in its official media. There is however insufficient evidence to prove that these boycott movements and reductions in direct investment on the part of Chinese companies are government-mandated sanctions and not simply the choice of individual actors. Our findings indicate that due to its asymmetrical interdependence on China, South Korea was more vulnerable to economic sanctions and thus more likely to make political concessions.