November 1, 2017 4:05 am JST  (Updated November 1, 2017 5:20 am JST)

Beijing looks to Seoul for ally on North Korea

By shelving THAAD dispute, China hopes to counter US hard line

OKI NAGAI and SOTARO SUZUKI, Nikkei staff writers

Chinese President Xi Jinping (left) and South Korean President Moon Jae-in will meet in November on the sidelines of the Asia-Pacific Economic Cooperation summit, Seoul says. © AP

BEIJING/SEOUL -- Beijing is moving to improve relations with Seoul ruptured over the deployment of a controversial missile defense system as it seeks to form a united front against Washington's bellicose approach to the North Korean threat.

Seoul affirmed in an agreement made public Tuesday that the Terminal High Altitude Area Defense system, or THAAD, that the U.S. has deployed in South Korea is not meant to target any third country and poses no threat to China's security interests. With Beijing responding that it had taken note of Seoul's statement, both sides agreed to work toward putting bilateral relations back on track.

South Korea has "stated publicly" that the country "will not join the U.S. anti-missile system, develop the [South Korea]-U.S.-Japan security cooperation into a tripartite military alliance or make additional deployment of the THAAD system," Chinese Foreign Ministry spokeswoman Hua Chunying told a news conference Tuesday.

"We hope that [South Korea] will match word to deed and follow through on these remarks," she said.

Show of unity

Hua insisted that "China's position on the THAAD issue has been clear and consistent" and "remains unchanged," painting Tuesday's agreement as reflecting, not Beijing's compromise, but Seoul's effort.

But South Korea has long claimed that THAAD will not harm China's national security interests. So Beijing's overtures seem more like a show meant for international consumption -- specifically by U.S. President Donald Trump, who will kick off a tour of Asia with a visit to Japan on Sunday.

As North Korea continues its saber-ratting in the form of nuclear and missile testing, Trump has hinted that a military solution could be in store. Beijing, however, is adamant that the conflict be resolved peacefully. Seoul has become "an indispensable partner" in reaching that goal, according to a South Korean diplomatic source. China made the move to ensure South Korea does not play along with America's hard-line approach.

Domestic considerations also seem to have swayed the timing of China's move: President Xi Jinping is in a better position to moderate his diplomatic stance after shoring up his power base at the Communist Party's twice-a-decade National Congress in October.

Back in favor

South Korea, meanwhile, hopes an end to the THAAD standoff will also end de facto sanctions on South Korean businesses over the issue. The Lotte conglomerate decided to sell its Lotte Mart supermarkets in China after many of the stores were shut down over alleged regulatory violations. China took the regulatory action after another Lotte unit volunteered to use a golf course it owns as the site for the THAAD deployment.

The company welcomed Tuesday's development, saying it would work to restore Chinese operations to normal. But the conglomerate is still looking to sell Lotte Mart's Chinese locations. Hyundai Motor, which saw Chinese sales plummet amid the THAAD frictions, has said it cannot comment on political matters.

South Korea's tourism sector has also been hit hard by the tensions: Visitors from China fell off some 70% on the year in July. China's top travel-booking site, Ctrip.com International, pulled tour packages to South Korea from its offerings in March. The site contacted Lotte's hotel arm last week to discuss resuming those tours, according to South Korea's Yonhap News Agency. Lotte's duty free unit is also hopeful that warmer ties will be good for business, but suspects it will take time for earnings to recover, according to a representative.

Cosmetics maker AmorePacific, which saw Chinese sales plunge, also welcomed the effort toward warmer ties, but noted that the company's own failings also played a part in the sales dip and pledged to bolster competitiveness with innovative new products and services.

Outcome unclear

Yet while Tuesday's agreement shelves the THAAD issue for the moment, the matter is far from resolved. South Korea has said President Moon Jae-in will meet with Xi in Vietnam on the sidelines of November's Asia-Pacific Economic Cooperation summit. But China's Hua said Tuesday that the two sides are still "coordinating" the talks.

If China and South Korea are serious about improving ties, Japan could have an easier time arranging the trilateral summit it hopes to host this year. But unity between those neighbors on North Korea could also hamper efforts by Seoul, Tokyo and Washington to put more pressure on Pyongyang.

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