South Korea Sees Chinese Tourists Return as Ties Improve

South Korean Vice Finance Minister Ko Hyoung-kwon said on Friday he expects improving diplomatic ties with Beijing to support the country’s economic growth next year as Chinese tourists return to its shores.

Ko’s comments come a day after Chinese President Xi Jinping and his South Korean counterpart Moon Jae-in pledged at a summit in Beijing to move past a spat over Seoul’s deployment of a US missile shield.

“One of many factors that makes next year more optimistic than this year is better Korea-China relations,” Ko told Reuters in an interview in Seoul.

He added there would be a resurgence in the visits by Chinese tourists, particularly if President Xi attends the 2018 Winter Olympics in February. 

Seoul has requested Xi visit South Korea for the event. The government hopes the games will serve as a turning point for peace on the Korean Peninsula.

For nearly a year, China-South Korea relations have been tense with Beijing angry about the deployment of the US-made Terminal High Altitude Area Defense anti-missile system in Korea. China claims THAAD’s powerful radar can penetrate deep into its territory. Ko expects an economic boon from improved relations with China in 2018 would help sustain momentum, which is currently supported by a memory chip boom and facility investments.

He said the economy is likely to expand 3.2% this year, but declined to give an estimate for next year.

For much of this year, South Korea’s tourism, cosmetics and entertainment industries have taken the brunt of a Chinese political backlash against Seoul. In October, the two nations agreed to normalize relations.

The number of inbound Chinese tourists, which used to account for about half of all visitors, fell by about 50% in the 10 months through October versus same period in 2016, costing South Korea more than $8 billion based on the average spending of Chinese visitors in 2015.

China is South Korea’s largest trading partner, buying about a quarter of its exports.