The South Korean economy beleaguered by rising external uncertainties has been given relief after Korea and China agreed to normalize bilateral relations that have frayed since last year following Seoul’s decision to host an U.S. antimissile system.

Korea’s Ministry of Foreign Affairs on Tuesday said in a joint press release with China that the two sides have agreed to swiftly recover exchanges and cooperation in all areas to normal level. Although the statement does not directly mention China’s economic retaliation actions against Seoul over the deployment of Terminal High Altitude Area Defense (THAAD) system, industry observers noted that the statement implies that China would ease or remove retaliation moves.

The joint statement has made the improvement in bilateral ties official after a meaningful hint towards the direction after Beijing surprisingly agreed to renew $56 billion currency swap deal, financial safety net for the Korean economy, earlier this month. The latest move is expected to further ease concerns over the Korean economy that has been hit hard by China’s retaliatory steps against Korean businesses.

In an apparent revenge against Seoul’s deployment of U.S. antimissile system, the Chinese government sanctioned popular Korean cultural content in the country and barred Chinese tour groups from visiting Korea. As a result, the number of Chinese tourists visiting Korea tumbled 39.4 percent from 5,265,923 to 3,192,248 in the first nine months of this year from a year ago.

Korean retail giants, Lotte Mart and Emart, have had to shut down their stores in China and withdraw from the country amid escalating crackdown on Korean business in China.

The latest improvement in bilateral relationship is raising hopes that China would soon officially lift the tourism ban and other regulations that posed a challenge to many Korean businesses that rely on Chinese consumers. A local Chinese travel agency in northern Chinese province of Hebei already posted a group tour package deal to Korea on its website last week for the first time in nearly seven months and a number of Chinese budget carriers plan to resume their services to Jeju Island, Korea’s popular resort destination.

Besides efforts to mend their ties, Korea and China also reaffirmed the principles of resolving North Korean issues peacefully and ensure denuclearization of the Korean peninsula in the joint statement. They vowed to continue to seek diplomatic means to resolve the North Korean nuclear and missile issues.

By Yoon Sang-hwan and Lee Eun-joo

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