South Korean President-elect Moon Jae-in, of the Democratic Party of Korea, celebrates with supporters at Gwanghwamun Square on May 9, 2017 in Seoul, South Korea.
Balancing act for new South Korean president
02:26 - Source: CNN

Story highlights

Xi Jinping and Moon Jae-in spoke for 40 minutes, according to South Korean officials

The two leaders discussed THAAD and the nuclear threat in the "first" call of its kind

CNN  — 

The election of South Korea’s new president, Moon Jae-in, has given fresh hope of a thawing in relations with China, which have recently been strained due to the deployment of a controversial missile defence system in South Korea.

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.

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THAAD system in South Korea almost operational
01:38 - Source: CNN

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.

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China's delicate balance with North Korea
01:42 - Source: CNN

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.

RELATED: South Korean company to China – Don’t blame us for THAAD missiles

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.