The government is seen to be in the last stages of a delicate balancing act of joining a China-led regional bank, while bringing in advanced U.S. missile interceptors.
The United States opposes Korea joining the Asian Infrastructure Investment Bank (AIIB), while China doesn't want THAAD or Terminal High Altitude Area Defense deployed in Korea — close to its doorstep.
Experts say that this conclusion was well captured by the changed position by ruling Saenuri Party Chairman Kim Moo-sung, who called Tuesday for THAAD deployment as an effective countermeasure to the North's nuclear missiles. Kim went as far as to say the North was a nuclear state.
He had shied away from commenting on the missile shield, saying that it was not appropriate for the ruling party to say anything on such a significant diplomatic issue.
"Kim's comment can be seen as the government's stance toward the THAAD deployment on Korean soil," said Yoon Hee-woong, senior researcher at Opinion Live.
"As the government is close to joining the AIIB after the trilateral foreign ministers' meeting among Korea, China and Japan on Saturday, Cheong Wa Dae and the ruling party appear to be turning positive on THAAD."
While Washington has "unofficially" sought to bring the missile defense system to the Korean Peninsula, Seoul has kept silent on the issue — also known as strategic ambiguity — due to resistance from China fearing that it could be used to nullify its military strike capabilities.
However, amid growing speculation that Korea is likely to join the AIIB — a scenario that the United States hates — the government is expected to allow the U.S. to deploy THAAD here.
"Kim is in line with Cheong Wa Dae over the issue," said Prof. Chung Goon-gi at Hongik University.
"While sending China a positive signal on Korea's AIIB participation at the meeting of top diplomats, Seoul has leant toward deploying THAAD."
Chung said that while the presidential office and the foreign ministry are hanging one step back due to possible diplomatic disputes with China, the defense ministry and the Saenuri Party's floor leader Yoo Seong-min and now the party chairman are leading the way.
Defense Minister Han Min-koo has said that the U.S. missile interceptor will help better deter threats from the North, while Yoo is also supportive of THAAD, describing its deployment as a matter of the nation's survival in the face of Pyongyang's evolving weapons.
Meanwhile, Gen. Martin Dempsey, chairman of the U.S. Joint Chiefs of Staff, said Tuesday that he will discuss with his Korean counterpart about integrated air and missile defense and others, igniting speculation that he may raise the THAAD issue. He is scheduled to arrive here today.
THAAD with a range of 150 kilometers is regarded as an indispensable element of the U.S. missile defense system along with the SM-3 that can intercept missiles at an altitude of 400 to 500 kilometers.
"We're making progress on building an integrated air and missile defense umbrella, and both the Koreans and the Japanese have made some commitments in procurements on their side to make us more interoperable," Dempsey said on a flight to Japan.