Photo: Speaker of the Assembly U Won-sik meets with Chinese leader Xi Jinping for the Harbin Asian Games 2025. Credit: Office of the Speaker of the Assembly.
According to a February 20 Xinhua report, the General Office of the Chinese Communist Party issued its 2025 plan to reinvigorate inbound foreign investment - which could imply that China may finally lift the unofficial economic sanctions against South Korea that have been in place since 2017, breathing new life into South Korea’s retail and cosmetics industry.
The so-called “Limit Korea Decree 한한령” came after South Korea, in the waning days of Park Geun-hye 박근혜’s presidency, permitted the United States military to deploy the terminal high altitude area defense (THAAD) missile system in Sangju, Gyeongsangbuk-do Province 경상북도 상주. Although the Chinese government officially denied the existence of the order, wide-ranging informal sanctions on South Korean tourism, retail and entertainment industries ultimately amounted to more than KRW 22t (USD 15.4b) a year, according to an estimate by the Korea Development Institute.
In 2016, more than 8m Chinese tourists visited South Korea; in 2024, only 4.6m did. In 2017, cosmetics giant AmorePacific 아모레퍼시픽’s operating profits fell by 30% after access to the Chinese market was throttled; the company has since shifted its focus to North America to the point that China is no longer its biggest market. A change in stance by China could lead to a rebound in the Chinese market for these and other industries, such as pop culture and packaged food exports.
