Our view that South Korean consumer-facing companies exposed to Chinese demand would come under intense pressure as arnresult of the diplomatic fallout between the two countries is playing out (See: 'Sino-Korea Tensions Pose Short-Term Risks ForrnConsumer Sectors', 30 March 2017). China responded to the decision by South Korea to host a US missile defence system inrnMarch 2017, by increasing regulatory oversight for South Korean firms operating in China, issuing a ban on Chinese tourist groupsrnvisiting the country, and encouraging a backlash against South Korean brands via criticisms in state media.
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