Chinese leader Xi Jinping called Moon Thursday to congratulate him for his electoral victory. During the 40-minute call, Xi stressed the importance of working together to achieve the common goal of denuclearizing the Korean peninsula - an aim dependent on resolving the thorny THAAD missile defence system issue.
Moon, a liberal who favors dialogue with North Korea, won
South Korea's elections on Wednesday, replacing impeached President Park Geun-hye.
Tong Zhao, an associate fellow at the Carnegie Tsinghua Center for Global Policy, said while the two nations share a similar agenda, the THAAD issue is the number one problem between them.
Zhao said though the tone of the call showed progress, there were no real specifics at play and there's still a lot of uncertainty regarding how the two nations will move past the issue.
"I still believe Moon Jae-in faces major difficulties in reversing the THAAD deployment, or even making any kind of modifications," Zhao says.
In a press conference after the call, South Korea's chief of presidential public affairs, Yoon Young Chan, said South Korea is "well aware" of China's interest and concerns over THAAD, adding that Moon expressed a wish during his conversation with Xi for bilateral communication about the issue "as soon as possible."
Xi during the call, also expressed China's commitment to achieving the denuclearization of the Korean Peninsula through "dialogue," a statement from the Chinese Foreign Ministry said.
"This is in the common interest of China and South Korea as well as overall peace and stability in the region," Xi said, according to the statement.
According to Zhao, China's understanding on how to deal with North Korea is very much in line with the new South Korean president. First freeze North Korea's nuclear development, then engage with them economically before before working towards the ultimate goal of denuclearization.
"The new South Korean government will actively communicate with China on these issues and seek appropriate resolutions," the statement quoted Moon as saying.
"It's much more likely now that they can work together," says Zhao.
Feeling the pinch
Beijing's displeasure over THAAD has reportedly been felt by South Korean businesses, particularly Lotte, the South Korean conglomerate that signed off on a land swap deal with the government to provide a site for the THAAD launch systems in late February.
During the call, Moon told Xi that South Korean people and companies in China "are going through many difficulties," and said he hoped Xi could "pay special attention so the restrictions and sanctions could be smoothly resolved," Yoon said.
The South Korean government said last week it believed Chinese authorities had told travel agencies in Beijing to stop selling trips to South Korea, intensifying fears of a trade war between the neighbors.
The Chinese government, however, denied any knowledge of such an order.
China is South Korea's largest trading partner, with the latter exporting up to $142 billion each year to the country.