Seoul, South Korea. The cost of being an American ally in a new Pacific Rim region is a lesson South Korea is learning the hard way. The country suffered a 40% plunge in Chinese visitors last month, according to the Korea Tourism Organization.

The Chinese tourist authorities are believed to have told travel agencies last month to stop selling trips to South Korea. Chinese tour groups have been canceling trips because of anger over the deployment of a controversial American missile defense system in South Korea.

The future is bleak, too. Bookings for stays of four to eight nights by Chinese visitors are down 28% in the second quarter of 2017 compared with a year earlier.

Government officials in China have vigorously opposed the stationing of the American missile system in South Korea, complaining that it threatens security and only causes problems in the region.

South Korean businesses that rely on foreign tourists are feeling the loss. Chinese citizens accounted for eight million of the roughly 17 million people who visited South Korea last year and are where a big chunk of South Korea’s tourist money comes from.

The South Korean losses come at a time when outbound travel by China’s burgeoning middle class is surging. The Chinese spent $261 billion traveling abroad last year, according to the World Tourism Organization, a 12% increase compared with the previous year. If Chinese customers are not happy with Korea, there are many other countries waiting to take their tourist dollars.

The tensions between Beijing and Seoul over the American missiles show little sign of easing. South Korea is pushing ahead with the system at the deployment site, the Korean Defense Ministry said. China’s Department of Defense restated its opposition, warning that “China will firmly take necessary measures to safeguard its own interests.”

Tags: ; ; ; ; ; ; ;