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Story highlights

China loudly objected to the planned deployment of the THAAD missile system

South Korea, US said THAAD was purely aimed at stopping North Korea

(CNN) —  

A diplomatic dispute between South Korea and China officially ended on Tuesday, following months of tense relations and economic retaliation triggered by the deployment of a controversial missile defense system.

In statements issued by both countries’ foreign ministries Tuesday, Seoul and Beijing said they recognized the “great importance” of the relationship between the two neighbors.”

Both sides agreed that strengthening exchanges and cooperation between Korea and China would create harmony of interests in both sides, and agreed to resume exchanges and cooperation in all areas as soon as possible,” the statement said.

Relations deteriorated after South Korea announced in July 2016 that it would deploy the US-built Terminal High Altitude Area Defense (THAAD) defense system to defend against North Korean missile threats.

The Chinese government took issue with the planned missile system, which Foreign Minister Wang Yi said could jeopardize “China’s legitimate national security interests.”

Tong Zhao, fellow at the Carnegie Tsinghua Center for Global Policy, told CNN it appeared the Chinese government had decided to move on from the issue, which he said had led to major losses for both countries, diplomatically and economically.

“China needs a smooth relationship with South Korea in order to maintain its own geostrategic interests over the Korean Peninsula,” he said.

“China has great concerns about the US alliance in the region and if China can build good relations with one of those US allies, that can work to undermine (it), in some sense.”

The resolution comes ahead of US President Donald Trump’s visit to Asia in November, where he will be visiting both South Korea and China, as well as Japan.

“Ever increasing tests from North Korea have been pushing South Korea and the US closer together, and the one chance (China) has of stopping that trend continuing is ahead of the presidential visit,” Euan Graham, director of the International Security Program at Sydney’s Lowy Institute, told CNN.

00:48 - Source: CNN
What is THAAD?

Troubled times

Since taking power in May, South Korean President Moon Jae-in has worked hard to renew positive relations with China, including temporarily suspending the THAAD deployment in June.

While the Chinese government made it clear Tuesday it still opposes the deployment of THAAD, both sides agreed to communicate with each other on the issue through military channels.

In their statements, South Korea and China announced they would hold a bilateral summit on the sidelines of the upcoming Asia-Pacific Economic Cooperation (APEC) forum in Vietnam to build on the restored diplomatic ties.

Both Xi and Moon share a similar view on how best to deal with North Korean leader Kim Jong Un, Zhao said, favoring diplomacy over force.

The backlash to the deployment of THAAD wasn’t limited to diplomatic relations, the chill had been rapidly spreading across South Korean businesses and entertainers.

In the early months of 2017, South Korean companies reported being targeted for retribution by Chinese authorities, while several Korean performers had their concerts in China canceled.

Chinese officials at the time denied the backlash was under official orders by the country’s government.

“Before the decision by (former President) Park to deploy THAAD, the bilateral relationship was at a historic high. It was unprecedented,” Zhao said.