The Terminal High Altitude Area Defense (THAAD) system
© Kim Jun-beom / ReutersThe Terminal High Altitude Area Defense (THAAD) system arrives in Seongju, South Korea, April 26, 2017
China's foreign minister has called on South Korea to resolve the issues impeding relations between the two nations, which are now "at a crossroads." Ties soured following the deployment of the American THAAD missile defense system in South Korea.

The statement by Foreign Minister Wang Yi came during the ongoing visit of the South Korean president's special envoy, Lee Hae-chan, to China. It is the first trip by a South Korean official to Beijing since Moon Jae-in won the presidential race earlier this month.

Speaking after the meeting with the envoy on Thursday, the Chinese foreign minister said that the two countries have experienced "unexpected setbacks" in bilateral ties this year, adding that relations are now "at a crossroads."

"We hope the new [South Korean] government will correct the problems we have encountered and take effective measures and positions as soon as possible to remove the obstacles that have been placed on the road to good relations between our two countries," Wang is quoted as saying by state newspaper the Global Times.

The Terminal High Altitude Area Defense (THAAD) anti-ballistic missile system positioned by the US in South Korea has become a bone of contention between the two Asian countries.

On Friday, Lee met Chinese President Xi Jinping, telling him that Seoul understands Beijing's concerns and is "ready to strengthen coordination with China to remove any obstacles" that undermine bilateral ties, Xinhua reported, citing the envoy.

The Chinese leader voiced his hopes to put relations "back onto a normal track" after resolving the existing disputes.

As the sides discussed the situation on the Korean Peninsula, Xi emphasized his support of the 'denuclearization' of the region "through dialogue and coordination" amid the growing tensions with North Korea and the military buildup in the area. He also said he hopes to address these issues together with the new South Korean government.

"China is willing to enhance communication with the new government of the ROK [Republic of Korea] on these issues, firmly promote denuclearization of the Korean Peninsula and restart related dialogue at an early date," the Global Times quoted Xi as saying.

While it is unclear whether Lee discussed the THAAD issue with China's president, it was raised during his meeting with top Chinese diplomat and state councilor Yang Jiechi. Jiechi said that Beijing 's "major concerns" should be respected, and that he hopes the THAAD issue will be appropriately resolved.

The American THAAD defense system was deployed in South Korea last month, in response to North Korean missile tests. Washington later invoiced Seoul for the defense shield - a step strongly opposed by the South Korean authorities.

Chinese-South Korean relations deteriorated after Seoul approved the positioning of the system. South Korean companies have claimed that Beijing took retaliatory measures against them, with the flow of tourists from China to South Korea dropping dramatically.

At the same time, leading South Korean automakers Hyundai Motor and Kia Motors cut vehicle production in China as their sales plummeted.

The long-disputed THAAD deployment was constantly opposed by China, which has urged a peaceful solution to the Korean crisis. Beijing has suggested calling on North Korea to stop missile and nuclear tests in exchange for the US and South Korea suspending military exercises in the region.