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The cost of an entry ban on China

송영관 2020/03/11 코리아타임즈

The cost of an entry ban on China


송영관 KDI 연구위원


Should Korea impose an entry ban on China to contain COVID-19? Certainly Hwang Kyo-ahn, chairman of the main opposition United Future Party, and his party think so. Fueled by growing fears over the spread of coronavirus, more than 760,000 Koreans signed a petition ― filed on Jan. 23 ― demanding that the Moon administration take a "preemptive" stance by stopping the inflow of Chinese nationals into the country.


But is it prudent for Korea to close its borders to the Chinese in its fight against this potential pandemic? China is the epicenter of the virus. Since the World Health Organization (WHO) was alerted to several cases of unusual pneumonia in Wuhan on Dec. 31, the COVID-19 outbreak has continued to grow, infecting more than 110,000 people in at least 112 countries.


Of the total number of confirmed cases, China takes the lion's share with just over 80,000, followed by Korea with roughly 7,500 to date. These staggering figures have prompted the U.S. Trump administration to prohibit entry to any foreign national who has traveled to China within the past 14 days, while there are no such restrictions for Korea thus far.


To answer questions over the rights and wrongs of banning China at the early stages, we must first consider the costs of the entry ban. What we need to keep in mind is that an entry ban could be reciprocal. That is, if Korea were to ban entry from China, China could follow suit with its own restrictions. Under these conditions, what would be the costs to Korea?


Firstly, the tourism industry would be significantly hit. Since 2013, China has been the largest source of foreign tourists to South Korea, making up around 34 percent of the 17.5 million foreigners traveling to the country in 2019.


Serving as a prime example is the 2017 Terminal High Altitude Area Defense (THAAD) conflict, during which tourism revenue plummeted by 4 trillion won from the previous year as the number of Chinese tourists visiting the peninsula plunged from 8 million to 4.17 million.


Secondly, a Chinese travel ban on South Koreans would have serious ramifications for the latter's exports to and Foreign Direct Investment (FDI) in the former; exports of semiconductor equipment, for example, also require labor to be dispatched for installations. Currently, China accounts for one-fourth of Korea's exports and 14 percent of outward FDI.


Finally, the difficulties that both Chinese and Korean students would have to endure cannot be overlooked. As of 2019, 70,000 Chinese students and 50,000 Korean students are attending colleges in each other's country.


In all, when implementing a policy, the costs as well as the effectiveness must be considered to avoid over-regulation. On Feb. 4, Korea enforced an entry ban on all foreigners who had been in China's Hubei province during the past 14 days. The spread seemed to be under control with just 30 cases until, on Feb.18, Patient 31―a super-spreader and member of the quasi-Christian cult Shincheonji ―was diagnosed with COVID-19.


Since then, the number of cases in Korea has skyrocketed, especially in Daegu and North Gyeongsang Province. Indeed, under current circumstances, a ban on Chinese nationals would neither help nor dampen efforts to prevent the further spread of the virus in Korea.


문의: KDI 홍보팀 김은총 044-550-4034, capkec@kdi.re.kr

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