South Korea to boost economic cooperation with China amid THAAD concerns

SEOUL (Reuters) - Worried that Beijing is punishing it over plans to deploy a U.S. anti-missile system, South Korea on Thursday said it will look to improve communication and cooperation with China to resolve difficulties faced by South Korean companies there.

FILE PHOTO: 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

The South Korean government will expand meetings with local businesses doing trade with or in China and engage Chinese officials more frequently in international meetings, South Korea’s finance ministry said in a statement released after a regular government meeting on external economic conditions.

Beijing strongly objects to South Korea’s decision last year to allow the United States to base a Terminal High Altitude Area Defense (THAAD) anti-missile battery in the country, worried that the system’s powerful radar can penetrate its territory.

South Korea and the United States say THAAD is only intended to curb the missile threat from North Korea.

Beijing is widely believed in South Korea to be retaliating over THAAD, including discriminating against some of its companies and cancelling performances by Korean artists without explanation.

“These measures could not have come out of thin air,” a senior finance ministry official, who was not authorized to speak with the media and declined to be identified, told Reuters.

“It’s on everyone’s minds right now.”

Finance Minister Yoo Il-ho has said the government was looking into whether China’s recent rejections for South Korean charter flight applications was related to the THAAD deployment.

On Thursday, he said uncertainties linked to China, South Korea’s biggest trading partner, could pose a threat to Asia’s fourth-largest economy.

Kang Chang-beom, vice president at South Korean battery maker LG Chem Ltd, said in a Thursday earnings presentation that plans were under way to minimize the risk from China as much as possible, such as exporting batteries that it makes in China to offset declining sales there.

“I think there’s a risk the Chinese government’s discriminatory measures against foreign companies will continue for the time being because of political issues,” he said.

On Tuesday, renowned South Korean soprano Sumi Jo said on her Twitter account that her China tour had suddenly been canceled after two years of preparations. It had been China that had initially invited her to perform, she said.

“It is greatly unfortunate that conflict between countries is now interfering with pure culture and arts,” said Jo.

Beijing has not confirmed whether such actions were linked to the anti-missile system deployment and Chinese Foreign Ministry spokeswoman Hua Chunying said on Wednesday she did not know anything about the Sumi Jo issue.

“As for people-to-people exchanges, we have consistently supported China and other countries having friendly people-to-people exchanges, as we think that these exchanges and the deepening of friendships are very important to developing relations between countries,” she said.

“But under these circumstances, we hope South Korea can attach importance to China’s serious concerns and create even better conditions for normal people to people exchanges between the two countries.”

Reporting by Christine Kim; Additional reporting by Jane Chung in SEOUL and Ben Blanchard in BEIJING; Editing by Tony Munroe and Nick Macfie