As South Korea's relationship with China deteriorates due to the placement of the US Forces Korea's Terminal High Altitude Area Defense (THAAD) system, major companies are facing an emergency situation in their exports. If China engages in some kind of trade retaliation, companies will inevitably face losses in the Chinese market, which accounts for 20-30% of their total sales.

The business community is currently refraining from directly mentioning the impact of the placement of the THAAD system. China has yet to take any specific measures, and a hasty prediction or response might irritate the Chinese government fueling the problem.

The Federation of Korean Industries (FKI) announced on July 10, "THAAD is a diplomatic and security issue, and not an issue on which a business organization should express its views." But there was widespread concern about China's economic sanctions.

In the case of Hyundai Motor Group, last year, the group sold a total of 1,675,922 vehicles in China (1,062,826 Hyundai Motor vehicles and 616,096 Kia Motor cars). This accounted for 20.9% of the group's global sales (8,015,745). Due to the large portion, there are concerns that if China opts for economic retaliation, Hyundai Motor Group may suffer the damages. If an anti-Korean sentiment rises in China, local sales can receive a direct blow. A representative of Hyundai Motor Group said, "It's a little early to say what kind of impact this (THAAD) will have on our business in China."

As for Samsung Electronics, China accounted for 15% of its total sales last year. Koh Dong-jin, head of Samsung Electronics' Wireless Business Division cited the problem of "recovering the Chinese market" as the company's top priority in recovering profitability last March when he presented Galaxy S7. In the case of Samsung SDI and LG Chem, they recently failed to receive the Chinese government's certificate for their electric car battery, and some believe this problem can become more difficult to resolve.

The duty free stores and cosmetics industry are also concerned about the impact the chilly relations with China may have. There is rising concern about a ban on travel to South Korea or a boycott of South Korean goods due to sanctions by the Chinese government. In recent years, Chinese customers accounted for 70% of duty-free sales.

ByunYang-gyu, director of the Division of Macroeconomic Research at the Korea Economic Research Institute said, "If China retaliates, the parts and materials industry that exports their products mostly to assembly plants in China will be hit particularly hard."