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China says willing to put South Korea ties back on track, urges THAAD resolution

[May 19, 2017] By Ben Blanchard

BEIJING (Reuters) - China wants to put ties with South Korea back on a "normal track", President Xi Jinping said on Friday, but Beijing also urged Seoul to respect its concerns and resolve tensions over the deployment of a U.S. anti-missile system that it opposes.

Relations between Beijing and Seoul, strained by disagreement over South Korea's hosting of the U.S. Terminal High Altitude Area Defense (THAAD) system, have taken on a more conciliatrory tone with the election earlier this month of President Moon Jae-in.

Xi told Moon's representative Lee Hae-chan on Friday that his visit showed the importance the new South Korean leader attached to relations with Beijing.

"China, too, pays great attention to the bilateral ties," Xi said in comments in front of reporters in the Great Hall of the People in Beijing.

"We're willing to work with South Korea to preserve the hard-won results, properly handle disputes, put China-South Korea relations back onto a normal track and benefit both peoples on the basis of mutual understanding and mutual respect," he said.

Lee gave Xi a hand-written letter from the popular, liberal Moon, who easily won election earlier this month to replace Park Geun-hye, who was ousted in a corruption scandal.

"President Moon said he hopes I'd also pass on his gratitude to you for your message of congratulation and the telephone call after he was elected," Lee said, before reporters were asked to leave the room.

According to the official Xinhua news agency, Xi told Lee: "China is willing to strengthen communication with the new South Korean government... (and) continue to push for the denuclearisation of the Korean peninsula."

In a separate meeting with Lee on Friday, China's top diplomat Yang Jiechi said China "hopes that South Korea can respect China's major concerns (and) appropriately resolve the THAAD issue," Xinhua reported.

INFURIATED

China has been infuriated by the U.S. deployment of the THAAD system in South Korea, saying it was a threat to its security and would do nothing to ease tensions with Pyongyang.

The United States and South Korea have said the deployment is aimed purely at defending against any threat from North Korea, which experts have thought for months is preparing for its sixth nuclear test in defiance of United Nations sanctions.

South Korea has complained that some of its companies doing business in China have faced discrimination in retaliation for the THAAD deployment.

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South Korean special envoy Lee Hae-chan (L) meets China's President Xi Jinping at the Great Hall of the People, in Beijing, China May 19, 2017. REUTERS/Jason Lee

However, Xi's comments helped push up the shares of several South Korean companies that rely on the spending of Chinese tourists, whose visits have fallen sharply amid the THAAD dispute.

Shares in Lotte Shopping <023530.KS> reversed earlier losses to rise 1.5 percent, while Hotel Shilla <008770.KS>, South Korea’s second-largest duty free store operator, rose 2.8 percent. Shares in AmorePacific <090430.KS>, its largest cosmetics firm, were up 0.9 percent.

The North has vowed to develop a missile mounted with a nuclear warhead that can strike the mainland United States, saying the program is necessary to counter U.S. aggression. The threat from Pyongyang presents U.S. President Donald Trump with one of his greatest security challenges.

The United States, which has 28,500 troops in South Korea to guard against the North Korean threat, has called on China to do more to rein in its ally and neighbor. Trump and Moon have both also warned that a major conflict with the North is possible.

Moon sent envoys to the United States, China, Japan and the European Union this week in what the government calls "pre-emptive diplomacy". His envoy for Russia will leave next week.

Before leaving Seoul for Beijing, Lee said Moon could meet Xi as early as July at a Group of 20 summit in Germany, while a separate meeting could also be possible in August.

(Reporting by Ben Blanchard; Additional reporting by Christian Shepherd in BEIJING; Writing by Tony Munroe; Editing by Stephen Coates and Paul Tait)

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