China-South Korea ties have been moving in different directions, reflecting a change in their behaviour toward each other. South Korea is not a direct neighbour of China but is divided by the sea and North Korea. They do not have a historical enmity, but both were overcome by Japan during the wars. The Korean War divided them as China moved to save the north against American intervention.

Differences took a turn when the South Korean Government decided to install the Terminal High Altitude Area Defence (THAAD) in collaboration with the United States in an effort to respond to the North Korean nuclear missile provocation. The THAAD is an anti-missile system produced by Lockheed Martin. The United States has begun deploying the THAAD system in South Korea just after North Korea launched the latest four missiles.

Beijing took Seoul’s decision of the THAAD deployment negatively from the defence perspective as it introduced regional strategic imbalance. The track of land on which the THAAD will be deployed in South Korea, belongs to the Lotte Group, a private business conglomerate, which runs a huge business in China. The Chinese reaction came against the Lotte Group and negatively impacted trade and investment between the two countries in recent weeks.

The Lotte Group has around 120 supermarkets in China and has employed between 700 to 13,000 people. The group started business in China in 2008. Chinese public has been reacting against the Lotte Group, finding them traitors, and calling to boycott the Lotte supermarkets. Because of safety reasons, some stores have been shut down. Passenger’s traffic between China and South Korea has also been declined recently.

THAAD has enough capability to spy on China and also on Russia. THAAD forces China to develop new missiles system and make new deterrence, bringing new arms race, when North Korea possesses deadly nuclear weapons and warheads. Even drastic actions were suggested by the Chinese media to tackle the THAAD issue. The Global Times on January 30, pointed out that the deployment of “THAAD overshadows 25th anniversary of Beijing-Seoul diplomacy.”

South Korea significantly matters in global economy. It is the fifth largest export economy in the world. It is the world’s 11th largest economy and the 4th largest in Asia after India, Japan, and China. South Korea enjoyed robust economic ties with China and their trade reached over US$ 300 billion. South Korea’s trade dependency on China is fairly great.

It enjoyed the highest trade surplus of US$ 37.5 billion with China last year. Its second largest trade surplus of US$ 31.2 billion was with Hong Kong. Over a quarter of South Korean exports ie US$ 124.4 billion go into China alone, making it the largest export destination. To Hong Kong, South Korea exported US$ 32.8 billion. South Korea also significantly matters in China’s trade. It is the 5th largest export destination of China taking over US$ 101.5 or 4.4 percent billion China’s exports.

Seoul would no longer tolerate the loss of this huge trade with China. It seems that South Korea might be moving to correct the strategic imbalance created by the THAAD deployment to continue its robust economic ties with China.

On the other hand, a compromising resolution of the THAAD deployment is also highly in the interest of China for the recovery of its ongoing economic slowdown, keeping in mind that Japan, Vietnam, India, and Singapore are vital trading partners of China. Stable trading relations are in the interests of both China and South Korea and the THAAD spate should be settled outside of the strategic overtures.

China has interests in the Korean Peninsula divided between the two Koreas. Over 200,000 Chinese soldiers lost their lives in the Korean War (1950-53). The normalisation and improvement of ties between Beijing and Seoul were vital to create prospects of peace on the Korean Peninsula.

China and South Korea relations go back to prehistoric times. Both were sharply divided by the Cold War. They established diplomatic relations in 1992 when Seoul severed ties with Taiwan. This year marks the 25th anniversary of their diplomatic relations but overcome by the THAAD spat. Earlier, South Korea recognised Taiwan and China maintained relations only with North Korea.

The case of the impeachment of the South Korean President Park Geun-hye has been completed after the Constitutional Court upheld the decision of the Parliament issued on March 10. She has been formally removed from the office. General elections will be held within 60 days – not later than May 9. Her impeachment will also have repercussions for South Korea relations with China. She improved relations with China considerably but this was marred by the decision of the deployment of THAAD.

China perceived the decision of President Park impeachment in the context of reversal of the THAAD deployment. The United States sees her impeachment otherwise without reversal to the THAAD deployment and South Korean Government adherence to that. Once the elected government was formed, one has to see how the final decision would be made.