China has abruptly ended its contract with a Korean company seemingly in retaliation to Seoul’s decision to deploy a U.S. anti-ballistic missile system.

South Korea`s Kosdaq-listed software and platform provider TOBESOFT Co. said in a regulatory filing on Wednesday that China’s state-owned investment company International Sourcing Promotion Center China (ISPC) abruptly notified the termination of a deal signed with its subsidiary SF Holdings Co. to jointly invest in a startup fund.

The Korean company added that ISPC unilaterally notified the termination, citing the contract could no longer be fulfilled due to the withdrawal of its Korean business and sensitive issues between the two countries including the missile deployment.

This marks the first visible case of Beijing’s retaliation against a Korean company after Seoul decided to deploy the U.S.-made THAAD system, which is necessary for protection against North Korea. China has strongly opposed the deployment of the missile-defense system on the Korean peninsula, fearing that the advanced X-band radars could reveal sensitive information about its missile platforms to the U.S.

There have been several instances of economic activities scuttled between the two countries in the aftermath of the THAAD deployment. South Korean pop stars and actors saw their planned events and television appearances cancelled in China. Chinese authorities launched co-ordinated fire, safety and tax investigations into Lotte’s operations in Shanghai, Beijing, Shenyang and Chengdu shortly after the South Korean conglomerate and the country’s defense ministry reached a deal to emplace an incoming missile defense battery on one of the firm’s golf courses. Three Chinese firms had expressed their interest in the acquisition of ING Life operations in Seoul, but all of them walked away.

Experts say the Korean government should come up with some countermeasures as Chinese retaliatory actions are increasingly threatening to hurt the Korean economy.

By Kim Tea-joon and Yoo Tae-yang

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]