China’s retaliation against Korea’s deployment of the Terminal High Altitude Area Defense (THAAD) system would create a damage of 8.5 trillion won for Korea and 1.1 trillion won for China.
According to a report released on May 3 by the Hyundai Research Institute, China’s retaliatory measures would cause Korea to suffer a damage of up to 0.5 percent of its nominal GDP this year, much higher than the level of the potential damage that China would face (0.01 percent of its nominal GDP).
By area, Korea would suffer seven times higher damage than China in the tourism sector. Back in March, China introduced a measure banning its travel agencies from selling Korea tour programs.
The report estimated that Korea would suffer a damage of about 7 trillion won this year due to the decline in the number of Chinese tourists. The report added that it would also lead to a decrease in the number of Koreans traveling to China, causing the country to suffer a damage of 1 trillion won.
Since China took concrete steps to hit back against Korea’s THAAD deployment, Korean tourists reduced their travel to China and instead traveled more to Japan, Thailand, and the Philippines.