Damages from reduced trade in Korea’s biggest export market and increased business risks from soured relationship with China over deployment of Terminal High Altitude Area Defense (THAAD) would pare income of Korean listed companies by more than 5 trillion won ($4.3 billion) and the nation’s gross domestic product (GDP) by 0.2 percent, studies showed.
According to a study conducted by Maeil Business Newspaper in collaboration with NH Investment & Securities Co. on Sunday, the combined net profit of the nation’s companies listed on Seoul stock exchange could come down to 99.75 trillion won this year from last year’s 100 trillion won due to the Chinese risk factor.
If Korean shipments of consumer products are entirely turned away, Korean listed companies could see up to 5.25 trillion won wiped out from their income this year. Popular consumer products like cosmetics, food, and beverages make up 3 percent of total shipments to China. If sanction widens to broader sector like intermediary goods and entertainment contents, exports to China could be hurt by 5 percent, NH Investment & Securities said.
The toll would be heavier when counting in the losses in tourism and services sector.
Separately, Nomura Securities estimated if Chinese visitors to Korea plunge by 40 percent in relation to the THAAD retaliation, Korea’s GDP could be shaved by 0.2 percent.
The Chinese that make up the bulk of tourists to Korea are estimated to have contributed to 0.5 percent to the Korean economy, given 1.2 percent share of the tourism account in GDP.
By Han Ye-kyung and Moon Il-ho
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]