South Korea, China agree to step up exchanges to re-set ties after missile defense row

By Sangmi Cha and Hyonhee Shin

SEOUL (Reuters) - South Korea and China agreed to beef up diplomatic and cultural exchanges to "completely normalize" ties that soured over the deployment of U.S. anti-missile systems in 2017, Seoul officials said on Wednesday.

Making his first visit to South Korea in over four years, China's State Councillor Wang Yi, who also serves as foreign minister, met South Korean Foreign Minister Kang Kyung-wha and was set to meet President Moon Jae-in on Thursday.

Relations between the two countries were strained by a dispute that erupted over the installation of the U.S. Terminal High Altitude Area Defense (THAAD) system in South Korea, which led to a sharp slump in South Korea's tourism, cosmetics and entertainment industries.

Kang and Wang agreed to hold the first gathering of a planned joint vice-ministerial panel on people-to-people exchanges "in the near future" and create a new meeting on maritime affairs, South Korea's foreign ministry said in a statement.

"Both sides concurred that relations should be put back on a normal orbit and completely normalized," a ministry official told reporters after the meeting.

Kang and Wang also discussed Moon's expected trip to China later this month for a trilateral summit with Japan, a possible visit to Seoul by Chinese President Xi Jinping, as well as stalled denuclearization talks between North Korea and the United States, the ministry said.

Calling the two countries "close neighbors, friends, and partners", China's Wang said at the start of the meeting that they should work together to keep regional peace and stability.

The biggest threat the world faces is "unilateralism that destroys the global order and hegemonic acts that challenge rules of international relations," Wang said, in a purported swipe at the United States, whose rivalry with China is intensifying.

Addressing North Korean issues, Wang said North Korea's reasonable concerns about its security should be respected and resolved, China's foreign ministry said in a statement.

Kang told Wang she hoped for in-depth discussions to promote economic, cultural and people-to-people exchanges, as well as "ways to work together to establish denuclearization and peace on the Korean peninsula".

South Korea sees China as instrumental in reviving the stalemated nuclear talks between the United States and North Korea, a longtime ally of Beijing.

Kang and Wang agreed to cooperate to facilitate the talks based on shared views that North Korea's nuclear programs cannot be accepted, peace should be maintained and there must not be war again, another South Korean foreign ministry official told reporters.

Negotiations between North Korea and the United States hit a stalemate after a day-long working-level meeting in October in Stockholm broke down.

North Korean leader Kim Jong Un has set an end-year deadline for Washington to review its approach to talks. U.S. officials downplayed the deadline, calling it artificial.

Wang last visited Seoul for a trilateral meeting, also attended by Japan, in 2015.

A year later a row blew up over the planned sitting in South Korea of the U.S. Terminal High Altitude Area Defense (THAAD) system, designed to intercept ballistic missiles.

Beijing said it upset the regional security balance as the system's powerful radar could penetrate into Chinese territory.

South Korea and the United States went ahead regardless, installing the anti-missile system in 2017, saying it was warranted because of North Korea's provocations.

North Korea has test fired dozens of missiles since, most recently on the U.S Thanksgiving holiday last week.

Seoul is also seeking to open additional military hotlines with Beijing to promote communications as Chinese military aircraft frequently violate South Korea's air defense zone, creating another source of contention.

China's Global Times newspaper said relations with Seoul had begun to thaw, despite remaining problems of the THAAD deployment.

"The ice is melting between the two countries but spring has not yet arrived," it quoted Renmin University of China associate professor Cheng Xiaohe as saying.

(Reporting by Sangmi Cha and Hyonhee Shin; additional reporting by Heekyong Yang; Writing by Josh Smith; Editing by Simon Cameron-Moore, William Maclean)