Tag Archives: South Korea

South Korea fears further missile advances by North this year in threat to U.S.

A flag is pictured outside the Permanent Mission of North Korea in Geneva, Switzerland, November 17, 2017.

By Hyonhee Shin

SEOUL (Reuters) – North Korea may conduct additional missile tests this year to polish up its long-range missile technology and ramp up the threat against the United States, South Korea’s spy agency said on Monday, adding that it was monitoring developments closely.

North Korea is pursuing nuclear weapons and missile programs in defiance of U.N. Security Council sanctions and has made no secret of its plans to develop a missile capable of hitting the U.S. mainland. It has fired two missiles over Japan.

The reclusive state appears to have carried out a recent missile engine test while brisk movements of vehicles were spotted near known missile facilities, Yi Wan-young, a member of South Korea’s parliamentary intelligence committee which was briefed by Seoul’s National Intelligence Service, said.

No sign of an imminent nuclear test had been detected, Yi noted. The third tunnel at the Punggye-ri complex remained ready for another detonation “at any time”, while construction had recently resumed at a fourth tunnel, making it out of use for the time being.

“The agency is closely following the developments because there is a possibility that North Korea could fire an array of ballistic missiles this year under the name of a satellite launch and peaceful development of space, but in fact to ratchet up its threats against the United States,” the lawmakers told reporters after a closed-door briefing by the spy agency.

North Korea defends its weapons programs as a necessary defense against U.S. plans to invade. The United States, which has 28,500 troops in South Korea, a legacy of the 1950-53 Korean war, denies any such intention.

Pyongyang is also carrying out a sweeping ideological scrutiny of the political unit of the military for the first time in 20 years, according to Kim Byung-kee, another lawmaker in the committee.

The probe was led by the ruling Workers’ Party’s Organisation and Guidance Department and orchestrated by Choe Ryong Hae, who once headed the General Political Bureau of the Korean People’s Army himself until he was replaced by Hwang Pyong So in May 2014.

As a result, Hwang and Kim Won Hong, who Seoul’s unification ministry said was removed from office in mid-January as minister of the Stasi-like secret police called “bowibu”, had been punished, the lawmaker said. He did not elaborate.

Choe, who was subjected to political “reeducation” himself in the past, appears to be gaining more influence since he was promoted in October to the party’s powerful Central Military Commission.

The National Intelligence Service indicated that Choe now heads the Organisation and Guidance Department, a secretive body that oversees appointments within North Korea’s leadership.

“Under Choe’s command, the Organisation and Guidance Department is undertaking an inspection of the military politburo for the first time in 20 years, taking issue with their impure attitude toward the party leadership,” the lawmaker, Kim, said.

Separately on Monday, South Korea approved a request by a South Korean to attend an event in the North marking the anniversary of the death of his mother who formerly led the Chondoist Chongu Party, a minor North Korean political party.

The son, identified only by his surname Choi, will be the first South Korean to visit the North since liberal President Moon Jae-in took office in May.

He is scheduled to arrive in Pyongyang via China on Wednesday and return on Saturday, according to Seoul’s unification ministry.

A senior Chinese official wrapped up a four-day visit to North Korea on Monday, apparently without meeting the country’s leader, Kim Jong Un.

Song Tao, head of the international department of the Chinese Communist Party, met senior officials from the Workers Party of Korea and “exchanged views on the Korean peninsula issue”, China’s official Xinhua news agency said.

“The ruling parties of China and the Democratic People’s Republic of Korea on Monday pledged to strengthen inter-party exchanges and coordination, and push forward relations,” it added, using North Korea’s official name.

Song had been in Pyongyang to discuss the outcome of the recently concluded Chinese Communist Party Congress in Beijing.

 

(Additional reporting by Christine Kim, and Ben Blanchard in BEIJING; Editing by Nick Macfie and Clarence Fernandez)

 

South Korea postpones university exam after rare earthquake

By Christine Kim and Cynthia Kim

SEOUL (Reuters) – South Korea postponed its annual university entrance exam by a week on Wednesday after a rare earthquake rattled the country, shaking buildings and causing damage but no deaths.

Minister of Education Kim Sang-kon said the hugely competitive exam, scheduled for Thursday, would be postponed for the first time ever because of a natural disaster. It was the country’s second-biggest earthquake on record.

“A fair amount of damage was reported,” Kim told a media briefing.

“Due to the continued aftershocks, we are seeing many citizens, including students, unable to return home.”

The exam would now be held on Nov. 23 to ensure conditions were fair for everyone, he said.

The 5.4 magnitude quake struck about 9 km (5 miles) north of the southeastern port city of Pohang, the Korea Meteorological Administration said.

Shaking was felt across the country and there were numerous reports of minor damage. Operations at nuclear reactors were not affected, the state-run nuclear operator Korea Hydro & Nuclear Power Co said.

The university entrance exam is taken very seriously. Commercial airliners do not fly during listening portions of the exam, while financial markets open later in the day to ensure light traffic for students to get to their exam centers.

The country’s foreign exchange and stock markets will still open an hour late (0100 GMT) on Thursday, South Korean financial authorities said in text messages.

South Korea has relatively little seismic activity, compared with Japan to the east.

Its strongest quake on record was magnitude 5.8 in September last year.

The Meteorological Administration said nearly 20 aftershocks had shaken the region and more were expected in coming days.

(Reporting by Christine Kim and Cynthia Kim; Additional reporting by Jane Chung, Haejin Choi; Editing by Robert Birsel)

North Korea defector ‘stabilized’ after second surgery: South Korean surgeon

North Korea defector 'stabilized' after second surgery: South Korean surgeon

By Christine Kim and Joyce Lee

SEOUL (Reuters) – A North Korean soldier who suffered critical gunshot wounds during a defection dash over the border to South Korea this week stabilized on Wednesday after a second round of surgery, a doctor treating him said.

The soldier, whose rank and identity have not been disclosed, was flown by helicopter to hospital on Monday after his escape to South Korea in a hail of bullets fired by North Korean soldiers.

Wednesday’s surgery was “successful” in terms of staunching bleeding and the soldier had “stabilized much”, said Lee Cook-jong, the surgeon in charge of his treatment.

However, he remained unconscious and was not out of the woods, as complications from a severe hip fracture and possible infection remained major concerns, Lee said.

“We will be able to tell you after about 10 days,” Lee told reporters at a briefing, when asked about the soldier’s chances of surviving.

On Tuesday, government and military officials said the soldier was in critical condition but doctors expected him to live.

The soldier made his escape in a border “peace village” on the heavily guarded demilitarized zone between the two Koreas.

At first, he sped toward the border in a four-wheel drive vehicle but was forced to abandon it and flee on foot when one of its wheels came loose, South Korean officials said earlier.

He was hit by about seven bullets before he took cover behind a South Korean structure in a Joint Security Area (JSA) inside the demilitarized zone.

Doctors removed five bullets from him earlier and one more on Wednesday.

North Korea has remained silent on the issue, while no unusual activity has been detected at the border where the soldier defected, the South’s Unification Ministry said.

“There will need to be some questioning on why he defected after his treatment is over,” ministry spokesman Baik Tae-hyun told a regular briefing.

Monday was the first time since 2007 a North Korean soldier had defected across the JSA.

(Reporting by Christine Kim and Joyce Lee; Additional reporting by Hyunjoo Jin and Yuna Park; Editing by Clarence Fernandez, Robert Birsel)

Defecting North Korean soldier critical after escape in hail of bullets

Defecting North Korean soldier critical after escape in hail of bullets

By Christine Kim

SEOUL (Reuters) – A North Korean soldier is expected to survive critical wounds he received when his old comrades fired a hail of bullets at him as he made a defection dash to South Korea, the South’s government and military said on Tuesday.

The soldier had on Monday sped toward the border in a “peace village” in the heavily guarded demilitarized zone, in a four-wheel drive vehicle.

But when a wheel came loose, he fled on foot as four North Korean soldiers fired about 40 rounds at him, said Suh Wook, chief director of operations at South Korea’s Joint Chiefs of Staff, briefing lawmakers.

“Until this morning, we heard he had no consciousness and was unable to breathe on his own but his life can be saved,” Suh said.

Surgeons had removed five bullets from the soldier’s body, leaving two inside, Suh added, to murmurs from lawmakers who said the soldier’s escape was “right out of a movie”.

The soldier took cover behind a South Korean structure in a Joint Security Area (JSA) inside the demilitarized zone between the two Koreas.

South Korean and U.S. soldiers, fearing more North Korean fire, later crawled to him to rescue him, the United Nations Command said in a separate statement.

North Korea has not said anything about the soldier. Its military had not given any indication of unusual movements on Tuesday, the South’s military said.

While on average more than 1,000 North Koreans defect to the South every year, most travel via China and it is unusual for a North Korean to cross the land border dividing the two Koreas, which have been in a technical state of war since their 1950-53 conflict ended in a truce, not a peace treaty.

The U.N. Command, in place since the end of the war, said an investigation into the incident was being conducted.

South Korean Defence Minister Song Young-moo said it was the first time North Korean soldiers had fired toward the South’s side of the JSA, prompting complaints from some lawmakers that the South’s military should have returned fire.

Moon Sang-gyun, the South’s defense ministry spokesman, said military operations at the JSA were usually conducted under the orders of the U.N. Command, which is in turn under orders from the U.S. military.

INTESTINAL DAMAGE

The soldier, who was not armed, was flown in a U.N. Command helicopter to an operating theater where doctors began working to save him even before he was out of a uniform that indicated he held a lower rank, Suh said.

South Korean officials have yet to identify where the soldier came from or what his intentions were.

Lee Cook-jong, the surgeon in charge of the soldier’s care at the Ajou University Hospital, told reporters he was suffering from critical intestinal damage.

Hospital officials where under strict security agency orders not to talk to media and all updates on the soldier had to be through the military, workers there told Reuters.

Dr Lee had been “given a talking-to” after a brief exchange with the media, the hospital workers said.

The U.N. military armistice commission said it had informed the North Korean military that the soldier, who was found about 50 meters (150 feet) south of a Military Demarcation Line, was undergoing surgery for his wounds.

Suh said the South had also informed the North on Monday of the soldier and his treatment, via loudspeakers on the border.

North Korea has in the past complained that North Korean defectors had been abducted by South Korea, and it has demanded their release.

This month, the North demanded that South Korea return 12 waitresses it said had been kidnapped while working in China in 2016. South Korea said the 12 women, and one man, had chosen to defect to the South.

Monday was the first time since 2007 a North Korean soldier had defected across the JSA.

(Reporting by Christine Kim; Additional reporting by Cynthia Kim, Yuna Park and Heekyong Yang; Editing by Michael Perry and Robert Birsel)

North Korea nuclear arsenal too developed to destroy quickly, says Moon

North Korea nuclear arsenal too developed to destroy quickly, says Moon

By Christine Kim

SEOUL (Reuters) – South Korean President Moon Jae-in said on Tuesday it would not be easy for reclusive North Korea to destroy its nuclear arsenal quickly, even if wanted to, given its weapons programs were so developed.

North Korea is under heavy international pressure to end its weapons programs, pursued in defiance of U.N. Security Council resolutions. But it has vowed never to give up its nuclear arsenal.

Speaking to reporters in the Philippines, Moon said that if North Korea agreed to hold talks, negotiations could be held with all options open.

“If talks begin to resolve the North Korea nuclear issue, I feel it will be realistically difficult for North Korea to completely destroy its nuclear capabilities when their nuclear and missile arsenal are at a developed stage,” Moon said in a briefing.

“If so, North Korea’s nuclear program should be suspended, and negotiations could go on to pursue complete denuclearization.”

Moon’s remarks were made available by the presidential Blue House.

Last week, the North said it did not oppose dialogue, but would “never put the issue related to the supreme interests of the DPRK and security of its people on the bargaining table”.

“We are not interested in such dialogue and negotiations in the least,” the North’s official news agency said, referring to the country by its official name, the Democratic People’s Republic of Korea.

The North defends the programs as a necessary defense against U.S. plans to invade. The United States, which has 28,500 troops in South Korea, a legacy of the 1950-53 Korean war, denies any such intention.

U.S. President Donald Trump has traded insults and threats with North Korean leader Kim Jong Un as North Korea races toward its goal of developing a nuclear-tipped missile capable of reaching the United States.

Trump threatened in his maiden U.N. address to “totally destroy” North Korea if the United States was threatened and has said the time for talking, the policy of previous U.S. administrations, is over.

Moon reiterated his stance that now was the time to increase pressure on North Korea so that it would come to talks.

He said differences in understanding between South Korea and China, North Korea’s lone major ally, regarding the deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system on South Koran soil had not been resolved.

“China has not said it has changed its stance to agree to THAAD and still says THAAD infringes on its security. We have, in turn, explained THAAD is not aimed at China but only toward curbing North Korea’s nuclear and missile provocations,” he said.

Last month, South Korea and China agreed to end a year-long standoff over THAAD which had seen South Korean companies doing business in China suffer from retaliation against the system’s deployment.

(Reporting by Christine Kim; Editing by Nick Macfie)

Airport video shows North Korean embassy official with Kim Jong Nam murder suspects

Indonesian Siti Aisyah who is on trial for the killing of Kim Jong Nam, the estranged half-brother of North Korea's leader, is escorted as she leaves at the Department of Chemistry in Petaling Jaya, near Kuala Lumpur, Malaysia

KUALA LUMPUR (Reuters) – A North Korean embassy official and a manager of Air Koryo, the national airline, met suspects wanted for the killing of Kim Jong Nam shortly after the murder, according to video recordings shown at the trial in Kuala Lumpur on Monday.

Two women, Indonesian Siti Aisyah and Doan Thi Huong from Vietnam, and four men who are still at large, have been charged in the murder of the half-brother of the country’s leader, using banned chemical weapon VX at Kuala Lumpur airport on Feb. 13.

Defense lawyers have said Siti Aisyah and Huong were duped into thinking they were playing a prank for a reality TV show.

The four suspects, who were caught on airport camera talking to the women before they attacked Kim Jong Nam, were identified as North Koreans for the first time on Monday, a month since the trial began.

Three of them were seen meeting a North Korean embassy official and the Air Koryo official, both unidentified, at the main airport terminal within an hour of the attack, lead police investigator Wan Azirul Nizam Che Wan Aziz told the court.

North Korea has vehemently denied accusations by South Korean and U.S. officials that Kim Jong Un’s regime was behind the killing.

Kim Jong Nam, who was living in exile in Macau, had criticized his family’s dynastic rule of North Korea and his brother had issued a standing order for his execution, some South Korean lawmakers have said.

Footage played in the courtroom showed the Air Koryo official helping the three suspects at an airport check-in counter. He was later seen arranging a flight ticket for the fourth suspect too, Wan Azirul said.

Wan Azirul identified the men as North Koreans Hong Song Hac, Ri Ji Hyon, Ri Jae Nam and O Jong Gil, citing intelligence findings by the special branch of the Malaysian police.

Wan Azirul said he investigated and took statements from both the embassy and the Air Koryo official.

“They explained that the reason they were there was to assist every North Korean individual or citizen who boarded a flight to leave the country,” he told the court.

The North Korean embassy in Kuala Lumpur did not respond to Reuters’ telephone calls and emails to seek comment.

The sensational murder unraveled once-close ties between Malaysia and North Korea.

Malaysia was forced to return Kim Jong Nam’s body and allow the return home of three North Korean men wanted for questioning and hiding in the Kuala Lumpur embassy, in exchange for the release of nine Malaysians stuck in Pyongyang.

Wan Azirul said police intelligence also provided information on a fifth suspect identified as Ri Ji U, who was also “suspected to have the real name James”, based on images and photographs taken from Siti Aisyah’s phone.

 

(Reporting by Rozanna Latiff; Additional reporting by Joseph Sipalan; Editing by Praveen Menon and Clarence Fernandez)

 

Trump heads to Japan with North Korea on his mind

U.S. President Donald Trump shouts to reporters as he and and first lady Melania Trump board Air Force One for travel to Hawaii, on his way to an extended trip to five countries in Asia, from Joint Base Andrews, Maryland, U.S. November 3, 2017.

By Steve Holland

HONOLULU (Reuters) – U.S. President Donald Trump heads to Japan on the first stop of his five-nation tour of Asia on Saturday, looking to present a united front with the Japanese against North Korea as tensions run high over Pyongyang’s nuclear and missile tests.

Trump, who is on a 12-day trip, is to speak to U.S. and Japanese forces at Yokota air base shortly after arriving in Japan on Sunday and looked to stress the importance of the alliance to regional security.

Ballistic missile tests by North Korea and its sixth and largest nuclear test, in defiance of U.N. Security Council resolutions, have exacerbated the most critical international challenge of Trump’s presidency.

Aerial drills conducted over South Korea by two U.S. strategic bombers have raised tensions in recent days.

In a display of golf diplomacy, Trump is to play a round of golf with Japanese Prime Minister Shinzo Abe. The two leaders also played together in Florida earlier this year.

Trump will also have a state call with the Imperial Family at Akasaka Palace during his visit. Abe and Trump will meet families of Japanese citizens abducted by North Korea.

Joined by his wife Melania on part of the trip, Trump’s tour of Asia is the longest by an American president since George H.W. Bush in 1992. Besides Japan, he will visit South Korea, China, Vietnam and the Philippines.

Trump extended the trip by a day on Friday when he agreed to participate in a summit of East Asian nations in Manila.

His trip got off to a colorful start in Hawaii. He was taken by boat out to the USS Arizona Memorial, where lies the World War Two ship that was sunk by the Japanese during the Pearl Harbor attack in 1941.

The Trumps tossed white flower petals into the waters at the memorial in honor of those who died at Pearl Harbor.

 

TRADE, NORTH KOREA

Trump’s trip is to be dominated by trade and how to muster more international pressure on North Korea to give up nuclear weapons.

“We’ll be talking about trade,” Trump told reporters at the White House on Friday. “We’ll be talking about obviously North Korea. We’ll be enlisting the help of a lot of people and countries and we’ll see what happens. But I think we’re going to have a very successful trip. There is a lot of good will.”

Trump has rattled some allies with his vow to “totally destroy” North Korea if it threatens the United States and his dismissal of North Korean leader Kim Jong Un as a “rocket man” on a suicide mission.

White House national security adviser H.R. McMaster, briefing reporters on Friday, defended Trump’s colorful language.

“What’s inflammatory is the North Korean regime and what they’re doing to threaten the world,” McMaster said.

Trump will seek a united front with the leaders of Japan and South Korea against North Korea before visiting Beijing to make the case to Chinese President Xi Jinping that he should do more to rein in Pyongyang.

Trade will factor heavily during Trump’s trip as he tries to persuade Asian allies to agree to trade policies more favorable to the United States.

A centerpiece of the trip will be a visit to the Asia Pacific Economic Cooperation summit in Danang, Vietnam, where he will deliver a speech in support of a free and open Indo-Pacific region, which is seen as offering a bulwark in response to expansionist Chinese policies.

 

(Reporting By Steve Holland; Editing by Paul Tait)

 

South Korea spy agency sees signs of planned new missile test by North

North Korean leader Kim Jong Un visits a cosmetics factory in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on October 28, 2017.

By Hyonhee Shin

SEOUL (Reuters) – North Korea may be planning a new missile test, South Korea’s spy agency told lawmakers on Thursday, after brisk activity was spotted at its research facilities, just days before U.S. President Donald Trump visits Seoul.

Reclusive North Korea has carried out a series of nuclear and missile tests in defiance of U.N. Security Council resolutions, but has not launched any missiles since firing one over Japan on Sept. 15, the longest such lull this year.

However a flurry of activity including the movement of vehicles has been detected at the North’s missile research facilities in Pyongyang, where the most recent missile test was conducted, pointing to another possible launch, South Korea’s Intelligence Service said in a briefing to lawmakers.

It did not say how the activity was detected.

North Korea has made no secret of its plans to perfect a nuclear-tipped missile capable of reaching the U.S. mainland. It regularly threatens to destroy the United States and its “puppet”, South Korea.

“There is a possibility of a new missile launch given the active movement of vehicles around the missile research institute in Pyongyang. The North will constantly push for further nuclear tests going forward, and the miniaturization and diversification of warheads,” the intelligence agency said at the briefing.

The North’s nuclear testing site in the northwestern town of Punggye-ri could have been damaged by its sixth and largest nuclear test on Sept. 3, according to Kim Byung-kee, Yi Wan-young and Lee Tae-gyu, members of South Korea’s parliamentary intelligence committee.

The explosion triggered an aftershock within eight minutes and three additional shocks.

Japanese broadcaster TV Asahi, citing unnamed sources, said on Tuesday a tunnel at the test site collapsed after that explosion, possibly killing more than 200 people. Reuters has not been able to verify the report which North Korea on Thursday denounced as false and defamatory.

Pyongyang will likely detonate more devices as it tries to master the miniaturization of nuclear warheads to put atop missiles, the lawmakers said.

The third tunnel at the Punggye-ri complex remained ready for another test “at any time”, while construction had resumed at a fourth tunnel, making it unable to be used “for a considerable amount of time”, they added.

Trump is to visit five Asian nations in coming days for talks in which North Korea will be a major focus. The visit includes the North’s lone major ally, China, and U.S. allies Japan and South Korea, which have watched with increasing worry as Trump and North Korea have exchanged bellicose rhetoric.

 

(Reporting by Hyonhee Shin in Seoul; Editing by Nick Macfie)

 

Global Banks fearing North Korea hacking, prepare defenses

Binary code is seen on a screen against a North Korean flag in this illustration photo November 1, 2017.

By Jim Finkle and Alastair Sharp

WASHINGTON/TORONTO (Reuters) – Global banks are preparing to defend themselves against North Korea potentially intensifying a years-long hacking spree by seeking to cripple financial networks as Pyongyang weighs the threat of U.S. military action over its nuclear program, cyber security experts said.

North Korean hackers have stolen hundreds of millions of dollars from banks during the past three years, including a heist in 2016 at Bangladesh Bank that yielded $81 million, according to Dmitri Alperovitch, chief technology officer at cyber security firm CrowdStrike.

Alperovitch told the Reuters Cyber Security Summit on Tuesday that banks were concerned Pyongyang’s hackers may become more destructive by using the same type of “wiper” viruses they deployed across South Korea and at Sony Corp’s <6758.T> Hollywood studio.

The North Korean government has repeatedly denied accusations by security researchers and the U.S. government that it has carried out cyber attacks.

North Korean hackers could leverage knowledge about financial networks gathered during cyber heists to disrupt bank operations, according to Alperovitch, who said his firm has conducted “war game” exercises for several banks.

“The difference between theft and destruction is often a few keystrokes,” Alperovitch said.

Security teams at major U.S. banks have shared information on the North Korean cyber threat in recent months, said a second cyber security expert familiar with those talks.

“We know they attacked South Korean banks,” said the source, who added that fears have grown that banks in the United States will be targeted next.

Tensions between Washington and Pyongyang have been building after a series of nuclear and missile tests by North Korea and bellicose verbal exchanges between U.S. President Donald Trump and North Korean leader Kim Jong Un.

John Carlin, a former U.S. assistant attorney general, told the Reuters summit that other firms, among them defense contractors, retailers and social media companies, were also concerned.

“They are thinking ‘Are we going to see an escalation in attacks from North Korea?'” said Carlin, chair of Morrison & Foerster international law firm’s global risk and crisis management team.

Jim Lewis, a cyber expert with Washington’s Center for Strategic and International Studies, said it is unlikely that North Korea would launch destructive attacks on American banks because of concerns about U.S. retaliation.

Representatives of the U.S. Federal Reserve and the Office of the Comptroller of the Currency, the top U.S. banking regulators, declined to comment. Both have ramped up cyber security oversight in recent years.

 

 

(Reporting by Jim Finkle in Washington and Alastair Sharp in Toronto; additional reporting by Dustin Volz in Washington; editing by Grant McCool)

 

China, South Korea agree to mend ties after THAAD standoff

China, South Korea agree to mend ties after THAAD standoff

By Christine Kim and Ben Blanchard

SEOUL/BEIJING (Reuters) – Seoul and Beijing on Tuesday agreed to move beyond a year-long stand-off over the deployment of a U.S. anti-missile system in South Korea, a dispute that has been devastating to South Korean businesses that rely on Chinese consumers.

The unexpected detente comes just days before U.S. President Donald Trump begins a trip to Asia, where the North Korean nuclear crisis will take center stage, and helped propel South Korean stocks to a record high.

The installation of the U.S. Terminal High Altitude Area Defense (THAAD) system had angered China, with South Korea’s tourism, cosmetics and entertainment industries bearing the brunt of a Chinese backlash, although Beijing has never specifically linked that to the THAAD deployment.

Beijing worries the THAAD system’s powerful radar can penetrate into Chinese territory.

“Both sides shared the view that the strengthening of exchange and cooperation between Korea and China serves their common interests and agreed to expeditiously bring exchange and cooperation in all areas back on a normal development track,” South Korea’s foreign ministry said in a statement.

Before the THAAD dispute, bilateral relations flourished, despite Beijing’s historic alliance with North Korea and Seoul’s close ties with Washington, which includes hosting 28,500 U.S. troops. China is South Korea’s biggest trading partner.

“At this critical moment all stakeholders should be working together to address the North Korea nuclear challenge instead of creating problems for others,” said Wang Dong, associate professor of international studies at China’s Peking University.

“This sends a very positive signal that Beijing and Seoul are determined to improve their relations.”

As part of the agreement, South Korean President Moon Jae-in will meet Chinese President Xi Jinping on the sidelines of the summit of Asia-Pacific Economic Cooperation (APEC) countries in Vietnam on Nov. 10-11.

South Korea recognized China’s concerns over THAAD and made it clear the deployment was not aimed at any third country and did not harm China’s strategic security interests, China’s foreign ministry said.

China reiterated its opposition to the deployment of THAAD, but noted South Korea’s position and hoped South Korea could appropriately handle the issue, it added.

“China’s position on the THAAD issue is clear, consistent and has not changed,” Chinese Foreign Ministry spokeswoman Hua Chunying told a daily briefing in Beijing.

RETAIL RELIEF

The thaw is a big relief for South Korean tourism and retail firms as well as K-pop stars and makers of films and soap operas, which had found themselves unofficially unwelcome in China over the past year.

In South Korea, a halving of inbound Chinese tourists in the first nine months of the year cost the economy $6.5 billion in lost revenue based on the average spending of Chinese visitors in 2016, data from the Korea Tourism Organization shows.

The spat knocked about 0.4 percentage points off this year’s expected economic growth, according to the Bank of Korea, which now forecasts an expansion of 3 percent.

The sprawling Lotte Group, which provided the land where the THAAD battery was installed and is a major operator of hotels and duty free stores, has been hardest hit. It faces a costly overhaul and is expected to sell its Chinese hypermarket stores for a fraction of what it invested.

A spokesman for holding company Lotte Corp expressed hope that South Korean firms’ activity in China would improve following the announcement.

An official at Seoul’s presidential Blue House, who declined to be named given the sensitivity of the matter, said improvements for South Korean companies would come slowly.

Shares in South Korean tourism and retail companies rallied nonetheless, with Asiana Airlines gaining 3.6 percent and Lotte Shopping up 7.14 percent. The benchmark Kospi index hit a record for a third straight day, gaining 0.9 percent.

China has grown increasingly angry with North Korea’s ongoing pursuit of nuclear weapons and ballistic missiles in defiance of United Nations sanctions, even as it chafes at U.S. pressure to rein in its isolated ally.

NORTH KOREA TENSIONS

The recent deterioration in ties between China and North Korea may have contributed to Tuesday’s agreement, the Blue House official said.

Pyongyang has undertaken an unprecedented missile testing program in recent months, as well as its biggest nuclear test yet in early September, as it seeks to develop a powerful nuclear weapon capable of reaching the United States.

The head of NATO on Tuesday urged all United Nations members to fully and transparently implement sanctions against North Korea.

“North Korea’s ballistic and nuclear tests are an affront to the United Nations Security Council,” NATO Secretary General Jens Stoltenberg said in Tokyo, where he met Japanese Prime Minister Shinzo Abe.

Separately, a South Korean lawmaker said North Korea probably stole South Korean warship blueprints after hacking into a local shipbuilder’s database last April.

Expectations had been growing for a warming in the frosty bilateral ties following this month’s conclave of China’s Communist Party, during which Xi cemented his status as China’s most powerful leader after Mao Zedong.

Earlier this month, South Korea and China agreed to renew a $56 billion currency swap agreement, while Chinese airlines are reportedly planning to restore flight routes to South Korea that had been cut during the spat.

Tuesday’s agreement came after high-level talks led by Nam Gwan-pyo, deputy director of national security of the Blue House, and Kong Xuanyou, assistant foreign minister of China and the country’s special envoy for North Korea-related matters.

(Reporting by Christine Kim and Hyonhee Shin in SEOUL and Ben Blanchard in BEIJING, with additional reporting by Dahee Kim and Joyce Lee; Writing by Tony Munroe; Editing by Lincoln Feast and Ian Geoghegan)