Chinese President Xi Jinping speaks during a news conference at the Belt and Road Forum, at the International Conference Center in Yanqi Lake, north of Beijing, on May 15, 2017. 
Chinese President Xi Jinping urged world leaders to reject protectionism on May 15 at a summit positioning Beijing as a champion of globalisation, as some countries raised concerns over his trade ambitions. / AFP PHOTO / POOL / JASON LEE        (Photo credit should read JASON LEE/AFP/Getty Images)
North Korea tests missile amid China trade push
02:31 - Source: CNN
Beijing CNN  — 

Jeong Min-young is worried.

Everyday she checks the news fearing she’ll see more headlines about worsening ties between the country of her birth, South Korea, and her adopted home, China.

Since the beginning of the year, relations between Beijing and Seoul have soured over the deployment of a US missile defense system – THAAD – in South Korea.

On the Chinese internet, patriotic citizens posted calls for boycotts of South Korean goods and even staged performative displays of destroying make-up and other popular products, generating approving columns in Chinese state media.

Offline, according to Seoul, Beijing ordered an unofficial tourism boycott of the country, with tour agencies cutting trips to South Korea. In March, the number of Chinese visitors to the country dropped 40%, according to the Korea Tourism Organization. South Korean businesses operating in China were also hit.

In a sprawling barbecue restaurant atop a mall in Wangjing, an area of Beijing popular with the city’s large Korean population, Jeong said that she and many other Korean expats felt increasingly uncomfortable, as even Chinese friends seemed to look at them differently over THAAD.

But she was optimistic the new South Korean president – Moon Jae-in, elected this month – would be able to fix things: “We hope he can do it,” she said.

A shopping mall in Beijing's Wangjing area, which has a large Korean population. Store owners told CNN they had seen a drop in the number of customers since the THAAD dispute began.

Patching things up

Moon will be attempting to start the healing process Thursday, when South Korean special presidential envoy Lee Hae-chan meets with Chinese Foreign Minister Wang Yi, and two more senior officials Friday.

A liberal democrat who lost narrowly to now impeached President Park Geun-hye in 2012, analysts say Moon has an opportunity to draw a line under his predecessor’s damaged relations with Beijing and start afresh. Moon supports resuming talks between South and North Korea, and after his election victory, Chinese President Xi Jinping called him and vowed to work together for the “common goal” of a denuclearized Korean peninsula.

Kim Sung-hee, a restaurant owner in Wudaokao – another area of Beijing popular with Korean residents – was also optimistic Moon could patch things up. She told CNN her business had seen a 50% drop in customers since the THAAD issue first began.

But analysts warned that Moon will have a difficult path to weave, with THAAD already near fully operational. “Both countries want to improve relations,” said Tong Zhao, an analyst at the Carnegie Tsinghua Center for Global Policy. “But THAAD is still the most critical barrier for the relationship to go forward.”

A cardboard cut-out of South Korean actor Kim Soo-hyun at a shopping mall in Beijing. Korean culture is popular in China but relations have suffered due to THAAD.

Walking a tightrope

Throughout the election campaign, Moon called for deployment of THAAD to be halted and the decision about its future to be taken by the new government and the country’s parliament.

Instead, Washington and the caretaker government in Seoul sped up the roll-out of the missile system, announcing that it was partially operational a week before Moon was elected.

Zhao said this was likely intended to force Moon’s hand. “The system has already achieved initial operation capability,” he said. “Short of a major improvement in the North-South (Korea) relationship or the US-North Korea relationship, I don’t see how Seoul can argue for the US to withdraw the system or even suspend its functioning.”

This may be unacceptable to China, which argues THAAD is part of a US effort to contain its growing military power and spy on activity within China using the missile system’s powerful radar.

Adam Cathcart, an expert on China and Korea at the University of Leeds, said Beijing “has really backed itself into a corner on the THAAD issue, having made it an explicit red line issue for the Chinese public.”

“China can be more flexible,” Zhao said. “Instead of insisting on the withdrawal of this system, China can accept some technical modifications to the system and make it less threatening to the country’s nuclear deterrent.”

But he warned there had been no public signaling Beijing was ready to take such a step just yet.

The North Korean flag flies over the country's embassy in Beijing. China is North Korea's most important political and economic ally.

Neighborly quarrels

One development that might make it easier for Beijing and Seoul to improve relations are worsening ties between China and North Korea.

A North Korean missile launch this week came as China was hosting world leaders – including a delegation from Pyongyang – for a forum to promote the One Belt, One Road trade and infrastructure development initiative.

Relations between Beijing and Pyongyang have worsened as the US has increased pressure on China to help rein in North Korea’s nuclear program.

This month, North Korean state media warned China was crossing a “red line” in relations between the two countries, as Beijing danced “to the tune of the US.”

According to the most recent available figures from the Beijing municipal tourism authority, an estimated 200,000 Koreans live in the capital, mainly in Wangjing and Wudaokao in the northern part of the city.

Some Koreans in Beijing told CNN they hoped China would move away from the North and towards the South. Park Chung-Hwa, a Chinese-Korean tour operator in Wangjing, said he felt a certain level of kinship with North Koreans, “as we’re of the same ethnicity, and North Korea is also a socialist country,” but he added he found understanding the decisions of Pyongyang difficult, and strained ties between Beijing and Seoul were hurting his business.

Inside the North Korean embassy to China in Beijing, Pyongyang is keen to promote its long ties with China, but relations have been increasingly strained between the two neighbors.

Inside the North Korean embassy in Beijing, photos adorn the walls of Chinese officials meeting with the North Korean founder Kim Il Sung and his son and successor Kim Jong Il.

But the current North Korean leader, Kim Jong Un, has never met Chinese President Xi Jinping, nor has he ever visited Beijing, and relations between the two allies – said to have been “forged in blood” after the Korean War – are at their worst point in years.

Cathcart said “things are certainly fraught in a way that is worrisome, if not indicative of a wholesale shift in Beijing,” but he added that the opaque nature of politics in the two neighboring authoritarian regimes meant reading the tea leaves was always difficult.

“Like an iceberg, the vast majority of Chinese-North Korean exchange, dialogue, and resentments go undetected, and they have a way of muddling forward,” he said.