April 20, 2024

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[THE INVESTOR] BEIJING -- The spat over the deployment of a US terminal high altitude area defense in South Korea, which has dampened its relationship with China over the last two years, is dissolving but will still be put to the ultimate test, a Chinese high government official said earlier this month.

“After President Moon Jae-in took office, China and Korea reached a mutual understanding in handling the THAAD issue, and it is being solved gradually,” an official at the Ministry of Foreign Affairs told a group of reporters from South Korea, China and Japan visiting the Chinese Ministry of Foreign Affairs as part of a journalist exchange program hosted by the Trilateral Cooperation Secretariat.

The official who wished to remain anonymous as he was not permitted to talk to media on record also added that as peace talks are taking place in the Korean Peninsula, the real motivation behind the deployment would be put to a test. “A peaceful Korean Peninsula would be a good opportunity to test if the deployment of THAAD was for North Korea or China or Russia,” he said.

China has been opposing the deployment of THAAD in South Korea claiming that the US defense system threatens its national security. 

South Korean President Moon Jae-in (left) and Chinese President Xi Jinping shake hands after signing a memorandum of understanding in Beijing, China on Dec. 14, 2017.  Cheong Wa Dae

Although it appears to be taking a back seat, the deployment of THAAD has been a thorny issue for the two countries both politically and economically. Many businesses including retail, tourism and entertainment companies have been suffering from the political dispute, with South Korea’s retail giant Lotte Group being the biggest victim for providing the site for THAAD. 

After 10 years of business in the world’s second-largest economy, Lotte Mart withdrew from the market after most of its businesses were effectively put on hold due to inspection by the Chinese government and boycott by the locals. Lotte sold its businesses to local companies after its sales in the country tumbled from 1.13 trillion won (US$1.01 billion) in 2016 to 263 billion won in 2017.

Backed by Beijing‘s ban on South Korea-bound trip programs since mid-March in 2017, in apparent retaliation over Seoul’s development of THAAD, the number of foreign tourists to South Korea dropped 22.7 percent in 2017 from a year earlier, according to the Korea Tourism Organization.

Signs of a recovery were observed after President Moon visited China in December and following meetings between government officials. In late March, Chinese State Councilor Yang Jiechi visiting President Moon as a special envoy of Chinese President Xi Jinping said there will be “tangible results in the near future,” when the Korean president requested China terminate what is seen as retaliation for the THAAD deployment. 

The Trilateral Cooperation Secretariat, an international organization inaugurated in 2011, to promote peace and common prosperity among South Korea, China and Japan, hosts a journalist exchange program every year to enhance mutual understanding of media persons from the three countries.

By Park Ga-young (gypark@heraldcorp.com)