Hoping a thaw in relations with China will reopen opportunities after a diplomatic spat earlier this year cost many of them business, some 300 South Korean executives joined President Moon Jae-in for the start of his four-day trip to China on Wednesday.

File photo: South Korea’s President Moon Jae-in attends the APEC Economic Leaders’ Meeting in Danang, Vietnam November 11, 2017. Picture: Jorge Silva/Reuters

The delegation was the largest to accompany a South Korean leader abroad, and reflected the value the firms placed on mending ties with their country’s biggest trading partner.

Trade and business exchanges between the two countries froze earlier this year after South Korea deployed U.S.-made Terminal High Altitude Area Defense (THAAD) anti-missile system regardless of vehement objections from Beijing.

Among those who traveled were executives from some of the firms hit hardest by the backlash, including Lotte Group and cosmetics and entertainment firms such as Amorepacific and S.M. Entertainment.

Addressing around 500 Chinese and South Korean businessmen at a forum in Beijing, Moon stressed the need to “build a systemic foundation for a stable economic cooperation”.

Moon said he expects to sign a memorandum with President Xi Jinping at a summit on Thursday, a step toward follow-up negotiations of the South Korea-China Free Trade Agreement (FTA) concerning services and investments.

“This is expected to expand the entry of both countries’ companies into service industries, and revitalize mutual investments,” he said.

GRADUAL STEPS

The THAAD disagreement knocked about 0.4 percentage points off expected economic growth in South Korea this year and resulted in lost revenues of around $6.5 billion from Chinese tourists in the first nine months of the year, as the number of visitors fell by half.

Anti-South Korean sentiment also battered firms’ sales of entertainment, cosmetics and cars in China.

Multiple officials from South Korea’s largest companies told Reuters they hoped that Moon’s visit to China would mark the next step toward improving ties after the two governments reached an initial agreement in late October to move past the dispute.

Still, they were doubtful whether a sudden turnaround in business relations would be achieved over the coming days.

“If you look at earlier cases, it takes several, gradual steps for unspoken reprisals to be eased,” said an official from a Korean firm accompanying Moon who declined to be identified as the matter was sensitive.

“We’re hoping this is a key step.”

Reuters spoke to around 20 of the South Korean firms represented in the delegation, and none had any fresh investment or business deal announcements planned.

Instead, an official at game developer Wemade Entertainment Co Ltd, whose CEO attended the forum, said executives would be looking to reopen dialogue with Chinese counterparts.

“Rather than having a specific agenda, we are hoping for a space to discuss various matters,” the official said.

A POSSIBLE OPENING

In late November, China allowed travel agencies in Beijing and Shandong to resume some sales of group tours to South Korea, but tour agencies were told not to include South Korean retail-to-chemicals giant Lotte Group in travel packages.

Lotte, which provided the land where the THAAD system was installed, was hardest hit in the diplomatic standoff.

Its chain of hypermarkets and supermarkets in China were largely shuttered, and it is expected to sell the stores for a fraction of what it invested.

The conglomerate previously said it planned to sell the stores by the end of this year, but the talks have been in “a stalemate,” a Lotte Group official said, declining to be identified due to the sensitivities.

Still, the official hoped the summit would ease the way for the planned sales of hypermarkets in China and lead to a full lifting of group tour bans.

“We have big hopes about the summit,” the official said.