South Korea minister says China indirectly retaliating against THAAD

SEJONG, South Korea (Reuters) - China is suspected to be taking indirect action against South Korea’s decision last year to deploy a U.S. anti-missile system, South Korea’s finance minister said.

A Terminal High Altitude Area Defense (THAAD) interceptor is launched during a successful intercept test, in this undated handout photo provided by the U.S. Department of Defense, Missile Defense Agency. U.S. Department of Defense, Missile Defense Agency/Handout via Reuters/File Photo

China worries that the U.S. Terminal High Altitude Area Defence (THAAD) system’s powerful radar can penetrate its territory and it has objected to the deployment.

South Korea and the United States say the missile system is aimed solely at countering any threat from North Korea. It is due to be deployed this year.

“China is officially denying it, but we feel their actions are linked and that there have been indirect responses taken,” Finance Minister Yoo Il-ho told a news conference on Thursday at the ministry’s headquarters in Sejong City, south of Seoul.

“It’s hard to ask them what they’re up to when they have been denying it officially.”

Yoo did not elaborate on what he meant by “indirect action” but China recently rejected applications by South Korean carriers to add charter flights between the two countries.

Yoo said on Sunday the government was looking into whether China’s decision to deny the airlines’ applications, which came ahead of a traditional surge in Lunar New Year travel, was related to the deployment of the anti-missile system.

Asked about Yoo’s comments, Chinese Foreign Ministry spokesman Geng Shuang told a regular press briefing on Friday that China has an “open and positive attitude” towards trade relations with South Korea, but that “this requires a foundation of close friendship”. He did not elaborate.

Yoo also said South Korea planned to make efforts to reduce its trade surplus with the United States in response to an assertion by President-elect Donald Trump that the United States had been hurt by what he considers an unfair trade agreement with South Korea.

Another finance ministry official told Reuters separately the government could look into importing more U.S. raw materials and machinery parts as part of the effort to reduce the surplus.

Reporting by Shin-hyung Lee; Additional reporting by Christian Shepherd in Beijing; Writing by Christine Kim; Editing by Robert Birsel