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Chinese tourists visiting South Korea in March 2017. The Chinese government banned group tours to the country that month

As the onset of Chinese President Xi Jinping’s second term in office brings signs of a thaw in South Korea’s relations with China, which have been frozen since the deployment of the THAAD missile defense system on the Korean Peninsula, there is growing hope in South Korea’s distribution and tourism industries. The two industries are heavily dependent on China, and they have suffered heavily since the flow of Chinese tourists was cut off this past March after China slapped a ban on Korean cultural exports, including group tours to South Korea and the sale of South Korean travel packages.

According to multiple industry sources interviewed on Oct. 29, there are indications in numerous areas that South Korea and China are moving toward rapprochement following the conclusion of the 19th National Congress of the Communist Party of China. Ctrip, China’s largest online travel website, recently contacted Lotte Hotel about holding working-level deliberations aimed at setting up South Korean travel packages. This is the first time that Ctrip has set up travel packages with South Korean hotels since the THAAD retaliation got underway in March.

“Since these packages will be promoted online, sales could resume very quickly. It’s possible that the mood is changing after the party congress,” said a source at Lotte Hotel.

The Ctrip website and mobile application have also restored a service, previously suspended, that provides an introduction to South Korea. One Chinese airline reservation website even put up an advertisement offering special prices for tickets with Korean Air.

A Chinese budget airline has also grabbed attention with its announcement that it will be resuming air service to Jeju, which was cut off after the THAAD deployment. On Oct. 29, Shanghai-based Spring Airlines posted a notice on its website that it would be restarting three flights a week between Shanghai and Jeju on Oct. 31. The airline had reportedly not been operating the flights in question since July because of a decline in passengers. Airlines in both countries have reduced flights as demand plummeted after the Chinese authorities suspended group tours to South Korea in March.

The tourism industry in both countries has its eye on the possibility of a change in direction of the Chinese government. “The government’s position hasn’t changed, but individual companies seem to be testing the waters to see whether South Korean tourism will be permitted,” said one industry insider. Spring Airlines’ announcement that it is resuming its Jeju flights – despite this being the off season – is aimed at the possibility of increasing demand in Southeast China following the recent opening of Jeju amusement parks partly funded by Chinese capital, some believe.

But many think it’s too soon to predict a full-scale thaw. There are no indications that the Chinese authorities are going to lift their ban on group tours to South Korea, nor are the large airlines making any movements. Some caution against putting too much stock in airlines’ adjusting their flight service, something that is frequently done in line with demand.

According to figures released by South Korea’s Ministry of Land, Infrastructure and Transport on Oct. 27, airlines had requested 1,051 weekly regular flights between South Korea and China for the 2017 winter season (which lasts from Oct. 29, 2017, to Mar. 24, 2018). That was 16.2% fewer than last year, when there were 1,254 regular flights. When asked whether Spring Airlines will resume its service, a Ministry official said, “Spring Airlines has reported that it will not provide service in November, either, just like other Chinese airlines. It has yet to submit a report reversing that plan.”

On Oct. 24, a travel agency in Hebei Province published an advertisement on its website aimed at tour groups to South Korea. The special travel passage, scheduled for November, is organized around the theme of “South Korea in the Fall Is a Poem.”

“This travel agency is offering a special travel package to South Korea not for individuals but for groups, which have been banned. That’s a positive sign,” said one travel industry insider. But there is still caution in the air in China. The travel agency’s advertisement for the South Korean tour package has been deleted, and it’s unclear whether the tour will actually take place. While the distribution and tourism industries are expressing hopes about the possible return of the “youke” (the Chinese word for tourist), they advise against hasty optimism.

One company that is following these developments with particular interest is the Lotte Group. Lotte became the target of China’s retaliation over THAAD after the THAAD battery was deployed at a golf course owned by the company. It’s estimated that the losses that the THAAD retaliation has caused thus far for group affiliates – including duty-free stores, hotels, department stores and hypermarkets – is over US$1 billion. “It’s very encouraging that we’re seeing indications recently all over the place that South Korea-China relations are improving. Even so, we’re keeping an eye on developments since it’s still too soon to be optimistic about the future,” a source at Lotte said.

There are also some companies that are busily preparing marketing campaigns for Guanggun Jie (Singles' Day), which falls on Nov. 11. The holiday has already surpassed Black Friday in the US to become the world’s biggest shopping festival, earning it the moniker of “China’s Black Friday.” The E-Land Group has launched preparations for marketing for Guanggun Jie via E-Land China, its Chinese branch, while AmorePacific is gearing up for a promotion for Chinese customers that focuses on its Ryo brand of hair products, which are based on traditional Korean medicine.

A charity bazaar hosted by a South Korean school in Beijing on Oct. 28 was also cut short at the request of the Chinese police. The event was supposed to last from 9 am until 6 pm, but the organizers explained that they “determined that the police became more concerned about safety after more than 10 complaints were filed by locals about the excessive noise of the performance and because more than 6,000 people had gathered at the sports stadium by 11 am.”

Amid these developments, South Korean Ambassador to China Noh Young-min met Chinese Foreign Minister Wang Yi for the first time since Noh’s appointment at a different charity bazaar, which was organized by South Korean diplomats and businesspeople in Beijing on Oct. 29. Wang told Noh that he hopes there will be “good progress in our bilateral relations.”

By Kim Oi-hyun, Beijing correspondent and Heo Seung and Kim So-youn, staff reporters

Please direct questions or comments to [english@hani.co.kr]