Shares jump after China backs down from protesting South Korean companies after US missile defense deployment – Business Insider
Seoul and Beijing have agreed to mend relations
after the Chinese protested the deployment of US missile
defenses in South Korea.
South Korean shares are up as China seems to abandon
its concerns that the missile defenses posed a threat to its
The move comes just weeks before President Donald Trump
is scheduled to visit both countries.
SEOUL/BEIJING (Reuters) – Seoul and Beijing agreed on Tuesday to
work swiftly to get relations back on track following a year-long
standoff over the deployment of a U.S. anti-missile system in
South Korea which pummeled South Korean business interests in
The installation of the U.S. Terminal High Altitude Area Defense
(THAAD) system had deeply angered China and spilled over into
tourism, trade and even cultural ties with South Korea.
“Both sides shared the view that the strengthening of exchange
and cooperation between Korea and China serves their common
interests and agreed to expeditiously bring exchange and
cooperation in all areas back on a normal development track,”
South Korea’s foreign ministry said in a statement on Tuesday.
The unexpected detente comes just days before U.S. President
Donald Trump begins a trip to Asia where North Korea will again
take center stage.
South Korea’s President Moon Jae-in will also meet with China’s
President Xi Jinping on the sidelines of an upcoming summit of
Asia-Pacific Economic Cooperation (APEC) countries in Vietnam on
Nov. 10-11, South Korea’s presidential office said.
The two heads of state are likely to discuss North Korea’s
missile and nuclear program as well as ways to develop bilateral
ties, a senior South Korean presidential Blue House official
later told reporters, declining to be identified due to the
sensitivity of the matter.
Pyongyang has undertaken an unprecedented missile testing program
in recent months, as well as its biggest nuclear test yet in
early September, as it seeks to develop a powerful nuclear weapon
capable of reaching the United States.
The moves have angered China, North Korea’s only major ally, and
drawn further tough sanctions from the United Nations and the
The recent deterioration in ties between China and North Korea
may have contributed to Tuesday’s agreement, the Blue House
The head of NATO on Tuesday urged all United Nation members to
fully and transparently implement sanctions against North Korea,
which he said has emerged as a global threat able to fire
ballistic missiles as far as Europe and North America.
“North Korea’s ballistic and nuclear tests are an affront to the
United Nations Security Council,” North Atlantic Treaty
Organization Secretary General Jens Stoltenberg said in Tokyo,
where he met Japanese Prime Minister Shinzo Abe.
Separately, a South Korean lawmaker said North Korea probably
stole South Korean warship blueprints after hacking into a local
shipbuilder’s database last April.
Announcement welcomed, shares rally
In a statement coordinated with South Korea’s announcement,
China’s foreign ministry said the two countries would get
relations back onto a normal track “at an early date”.
South Korea recognized China’s concerns on the THAAD issue and
made it clear the deployment was not aimed at any third country
and did not harm China’s strategic security interests, China’s
foreign ministry said.
China reiterated its opposition to the deployment of THAAD, but
noted South Korea’s position and hoped South Korea could
appropriately handle the issue, it added.
South Korean companies operating in China have suffered since the
spat erupted last year, although Beijing has never specifically
linked its actions to the THAAD deployment.
“China repeated this stance during discussions, saying
difficulties faced by South Korean companies were prompted by
individual Chinese citizens angered by the THAAD deployment,” the
Blue House official said, adding that improvements for South
Korean companies would come slowly.
Lotte Group, which provided the land where THAAD was installed,
has suffered most. It faces a costly overhaul and is expected to
sell its Chinese hypermarket stores for a fraction of what it
A spokesman for Lotte Corp, the holding company of Lotte Group,
expressed hope South Korean firms’ activity in China would
improve following the announcement.
Foundation/Amanda Macias/Business Insider
South Korean tourism and retail shares rallied, with Lotte Tour
surging more than 18 percent and Lotte Shopping up as much as 5.7
Shares of Asiana Airlines gained as much as 4.6 percent.
Hopes have been growing for a thaw in the frosty bilateral ties
following China’s recently completed Communist Party conclave,
during which President Xi Jinping cemented his status as China’s
most powerful leader after Mao Zedong.
Earlier this month, South Korea and China agreed to renew a $56
billion currency swap agreement, while Chinese airlines are
reportedly planning to restore flight routes to South Korea that
had been cut during the spat.
Tuesday’s agreement came after high-level talks led by Nam
Gwan-pyo, deputy director of national security of the Blue House,
and Kong Xuanyou, assistant foreign minister of China and the
country’s special envoy for North Korea-related matters.