South Korean conglomerate Lotte Group has had work on a major theme park in China halted as tensions mount over a US missile defence system to be installed in South Korea.
The development (pictured) being constructed in Shenyang, northeastern China, was due for completion this year, and features a shopping mall, hotel and residential complex, all valued by Bloomberg at $2.6bn.
But Chinese authorities halted work on the scheme after a fire inspection in December, one of a spate of inspections and tax investigations hitting Lotte’s Chinese business outlets, a source told Reuters.
Korean media have portrayed the official interventions as retaliation against the multinational company after South Korea agreed to deploy the United States’ Terminal High Altitude Area Defence system (THAAD) on a patch of land that is now a golf course owned by Lotte.
The powerful radar system of THAAD is intended to counter missile threats from North Korea, but China opposes its deployment on the grounds that it can penetrate its own territory.
Lotte became the focus of geopolitical tensions when it agreed in principal to make its golf course, located in the Seongju region roughly 200km from Seoul, available to the government in a trade for land controlled by the Korean military.
Last month Lotte delayed internal board approval for the land swap deal.
Its difficulties are compounded by its business exposure to China, where it has around 120 retail establishments, and by political uncertainty in South Korea, where the former president, Park Geun-hye was impeached in December 2016 following a corruption scandal.
Image: Artist’s render of the Lotte Shenyang theme park planned for Shenyang, China, by master planner Thinkwell Group