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South Korean President Moon Jae-in said on May 14 there was a "high possibility" of conflict with North Korea, which is pressing ahead with nuclear and missile programmes it says it needs to counter United States aggression.

In an apparent fence-mending move, South Korea's new President Moon Jae-In dispatched his envoy Lee Hae-Chan to China after his election victory last week.

China's top diplomat, Yang Jiechi, called on Seoul on Friday to "respect China's major concerns and properly handle the issue of the deployment of the US Terminal High Altitude Area Defense (THAAD) missile defence system", according to the official Xinhua new agency.

The golf course, which Lotte Group, the country's fifth-biggest conglomerate had owned, was designated as a site for THAAD that Seoul and Washington agreed in July past year to deploy in southeast South Korea.

It wasn't clear if THAAD came up in Xi's talks with Lee, during which the Chinese leader sat at the head of the table in a manner usually reserved for meetings with lower-ranking Chinese officials.

(Chinese) "We hope the new South Korean government realizes the problems both countries are facing and takes effective measures to remove such obstacles to put the development of bilateral relations back on track".

THAAD is aimed at guarding against threats from nuclear-armed North Korea, but China fears it will upset the regional security balance.

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Before leaving Seoul for Beijing, Lee said Moon could meet Xi as early as July at a Group of 20 summit in Germany, while a separate meeting could also be possible in August.

North Korea has made no secret of the fact that it is working to develop a nuclear-tipped missile capable of striking the USA mainland and has ignored calls to halt its nuclear and missile programmes, even from China, its lone major ally. South Korean companies have claimed that Beijing took retaliatory measures against them, with the flow of tourists from China to South Korea dropping dramatically.

China says its influence has been exaggerated and has called on South Korea and the U.S.to end large-scale wargames seen as threatening by North Korea in exchange for the North suspending its missile launches and nuclear tests.

Wang on Thursday reiterated calls for its dismantling.

Since Moon Jae-in took office on May 10, signs have emerged that Beijing and Seoul are seeking to reconcile their differences and fix damaged relations caused by the THAAD dispute.

"Your visit to China to step up the communication on important issues related to bilateral relations... shows President Moon and his administration have attached high importance to our ties", Xi said.

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