China's president Xi Jinping will hold a bilateral summit with his South Korean counterpart Moon Jae-in next week in an effort to normalise relations after a damaging row over the deployment of a US missile interceptor.
South Korea had installed the US Terminal High Altitude Area Defence (Thaad) system in response to what it sees as the growing nuclear threat from North Korea, but China believed that the system's powerful radar could be deployed against its military.
“The two sides agreed to continue discussing the Thaad issue, which the Chinese side is concerned about, through a channel of dialogue between their militaries,” South Korea’s foreign ministry said in a statement after the two countries held talks.
The prospect of warmer relations between the two Asian nations comes ahead of US president Donald Trump's inaugural visit to Asia later this week, during which he will visit both China and South Korea, as well as Japan and Vietnam.
The US is a close ally of South Korea, and Mr Trump is trying to put pressure on China to do more to help resolve the nuclear standoff with North Korea.
China is South Korea’s biggest trading partner and the feud is reckoned to have cost the South Koreans more than €10 billion after Beijing launched an unofficial boycott.
Mr Xi and Mr Moon will meet on the sidelines of an Asia-Pacific security forum in Da Nang in Vietnam next week.
The apparent readiness to try to end the spat comes after Mr Xi asserted his authority as leader at a twice-a-decade congress of the ruling Communist Party.
Foreign minister Kang Kyung-wha told the parliament in Seoul that South Korea would not build a US missile defence network, would not deploy any additional Thaad interceptors and that a security co-operation pact with the US and Japan would not be formalised as a joint alliance.
“South Korea recognised China’s concerns related with the Thaad issue and made it clear that the deployment is not intended for a third country and does not impair China’s strategic, security interests,” the foreign ministry said in a subsequent statement, quoted by the Yonhap news agency.
Hit to tourism
Trade tensions badly hit South Korean tourism, with visitors from China down 70 per cent during the recent "Golden Week" holiday and companies such as Lotte forced to shut its department stores in China. Carmaker Hyundai sales fell 37 per cent in the first nine months of the year, while Kia sales were down 40 per cent.
Mr Moon is planning his first visit to China by the end of the year, while Mr Xi is due to travel to South Korea in February for the Winter Olympics in 2018.
Meanwhile, there are signs that China is stepping up its efforts to meet its commitments to UN sanctions against North Korea. China was North Korea’s ally in the 1950-53 Korean War, but relations have become strained over the North’s nuclear programme.
This week North Korean leader Kim Jong-un ordered all North Korean workers in China to come home by the end of this year, according to the Daily NK website. There are an estimated 20,000-30,000 North Koreans working in China.
Also, China imported more than half a million tons of coal from North Korea last month, down 72 per cent from a year earlier.