The soured relations between South Korea and China over the deployment of the US antimissile system have been put back on the right track.

The South Korean Foreign Ministry on Tuesday announced its agreements with its Chinese counterpart on the improvement of ties between the two countries, strained by Seoul’s decision to host the system and China’s subsequent economic retaliation.

The ministry said South Korea made clear that it is well aware of China’s positions and concerns and that the Terminal High Altitude Area Defense system does not harm China’s strategic security interests.

China, reiterating its opposition to the system deployed in South Korea, agreed to bear in mind the South Korean position and at the same time hoped that Seoul would deal with related problems properly.

The agreement is expected to ease the strain from economic retaliations over the THAAD deployment. It is welcome news for South Korea, which suffered enormous losses as a result.

The justifications that both sides gave to solve their conflicts over the THAAD issue sound convincing.

There were demands among politicians and local media here that South Korea should not make any submissive gesture, such as an apology for the deployment of the system in order to get China to lift economic retaliations. They have also urged the government to get across the fact that the system is a defensive measure which does not threaten China militarily.

The agreement also seems to have helped find a way for China to save face while ending its economic retaliations.

But it is not clear how South Korea should handle related problems. This needs to be dealt with through further communication through diplomatic and military channels.

On the same day, the presidential office announced that the two countries agreed to hold a summit during Asia-Pacific Economic Cooperation Summit meetings in Vietnam on Nov. 10-11.

If the South Korea-China summit during the APEC meetings goes smoothly, a visit by South Korean President Moon Jae-in to China in December and a visit by Chinese President Xi Jinping to Korea in February for the 2018 PyeongChang Winter Olympics are likely to follow. If these scenarios that South Korea seems to favor proceed well, the two nations will be able to work on removing any residual bitterness over the THAAD issue.

However, as important as the agreement to normalize their relations is that the two countries should coordinate their positions on the economic losses Korean businesses have already suffered.

According to the Ministry of SMEs and Startups, South Korean businesses’ trade losses due to Chinese retaliations over the THAAD deployment are estimated to total 8.5 trillion won ($7.5 billion) by the end of this year. The Korea Development Bank estimates that the losses will range from 7 trillion won to 22 trillion won. Lotte took a heavy blow for offering its golf range as the antimissile site. Many large and small Korean companies including Hyundai Motor, E-mart and cosmetics firms suffered enormous damage. The issue of economic losses due to retaliation needs to be dealt with.

Aside from this, the South Korean government must get a promise from Beijing that there will be no recurrence of similar retaliations. South Korea may have to deploy additional defensive weapons to fend off North Korean threats.

In the upcoming summit, Moon ought to reemphasize the need for the defense system. The THAAD system has been fielded in South Korea to protect the US forces in Korea from North Korean nuclear missile threats. If the North scraps its missiles, the system will no longer be needed in Korea.

South Korea and China are geopolitically and economically inseparable. Their smooth relations will benefit both sides not only in the fields of trade and the economy but in securing peace on the Korean Peninsula and in Northeast Asia. That being so, the restoration of their relations should not be a superficial one. Both countries should work more closely to open a new era of joint prosperity with mutual respect and consideration.