"Our country is making an enormous economic investment in China and the biggest semi-conductor factory operated by a South Korean company is based in China," Yun said to back up his assessment.

"It's incomprehensible that China would retaliate against such a country."

"China is also in the process of seeking 'market economy status' under the World Trade Organization ... if China takes economic retaliation over political issues, it would not be able to reach this goal," the chancellor noted. 

Economic retaliation is also unlikely given that there are only a few countries that have maintained good relations with China under the current regional environment, he also added. China has clashed with several countries over its claims in the South China Sea.

Still, Korea will have to brace for economic setbacks stemming from dwindling Chinese tourists in the wake of the thorny diplomatic ties with China over the THAAD deployment, the chancellor conceded.

"Nonetheless, our country needs to have (better) missile defense capabilities to protect its people since the country does not possess its own nuclear weapons," he noted.

The official's remarks highlights the potentially bumpy diplomatic relations Korea would have to wade through vis-a-vis its biggest trading partner in the run-up to the country's deployment of the high-tech U.S. defense system. (Yonhap)