Exclusive - South Korea president calls on China's Xi to do more on North Korea nuclear programme

By Jean Yoon and Soyoung Kim SEOUL (Reuters) - South Korean President Moon Jae-in said on Thursday China should do more to rein in North Korea's nuclear programme and he would call on President Xi Jinping to lift measures against South Korean companies taken in retaliation against Seoul's decision to host a U.S. anti-missile defence system. In an interview with Reuters ahead of his trip to Washington next week for a summit with U.S. President Donald Trump, Moon said 'strong' sanctions should be imposed if North Korea tests an intercontinental ballistic missile (ICBM) or conducts a sixth nuclear test. “It must be sufficiently strong enough that it would prevent North Korea from making any additional provocations, and also strong enough that it will make North Korea realise that they are going down the wrong path,” Moon said. The comments mark the toughest warning yet by the liberal former human rights lawyer, who was elected in May after campaigning for a more moderate approach to the North and engaging the reclusive country in dialogue. As a candidate, he said, sanctions alone have failed to impede Pyongyang's defiant pursuit of nuclear weapons and ballistic missiles. North Korea will acquire the technology to deploy a nuclear-tipped ballistic missile capable of hitting the mainland United States "in the not too distant future," Moon said. EXERT MORE PRESSURE "I believe China is making efforts to stop North Korea from making additional provocations, yet there are no tangible results as of yet," Moon told Reuters at the sprawling Blue House presidential compound. "China is North Korea’s only ally and China is the country that provides the most economic assistance to North Korea," Moon said. "Without the assistance of China, sanctions won't be effective at all." Moon's remarks echoed that of U.S. President Donald Trump, who said in a tweet on Tuesday Chinese efforts to persuade North Korea to rein in its nuclear programme have failed. Top U.S. officials pressed China on Wednesday to exert more economic and diplomatic pressure on North Korea-level in talks with their counterparts in Washington on Wednesday. “Maybe President Trump believes that there is more room for China to engage North Korea and it seems that he is urging China to do more. I can also sympathise with that message,” Moon said. China accounts for 90 percent of world trade with North Korea. Diplomats say Beijing has not been fully enforcing existing international sanctions on its neighbour, and has resisted tougher measures, such as an oil embargo and bans on the North Korean airline and guest workers. Washington has considered imposing "secondary sanctions" against Chinese banks and other firms doing business with North Korea. G20 MEETING South Korea and the United States agreed to deploy the Terminal High Altitude Area Defence (THAAD) system in response to the growing missile threat from North Korea. But the move has angered China, which says the system's powerful radar will look deep into its territory and undermine regional security. China has pressured South Korean businesses via boycotts and bans, such as ending Chinese group tours to South Korea and closing most of South Korean conglomerate Lotte Group's Lotte Mart <023530.KS> retail stores in China. Lotte handed over a golf course it owned in southern South Korea so the THAAD battery could be installed there. Moon said that while China has never officially acknowledged economic retaliation, many South Korean businesses face difficulties in China, and he hopes to hold talks with Xi at the G20 summit in Hamburg, Germany next month to address the issue. "If I have the chance to meet President Xi, I will ask for him to lift these measures. This is the agenda that we cannot evade," Moon said. “If we were to link political and military issues to economic and cultural exchanges, this could lead to some hindrance to the development of our friendly relationship between our two countries.” Moon said he wants to sit down with as many world leaders as possible in Hamburg -- including Xi, Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin -- where he expects the North's nuclear programme will top the agenda. JAPAN'S WARTIME PAST Japan is an important partner in the effort to resolve the North Korean crisis but Tokyo's refusal to fully own up to its wartime past, its claims to the disputed islands between the two countries as well as its growing military spending are concerning, Moon said. "If Japan were to show its strong resolve in looking back on its past history and sending a message that such actions will never happen again... then I believe that this will go a long way in further developing its relations with not only Korea but also with many other Asian nations," he said. Moon has said many South Koreans did not accept a deal reached by his conservative predecessor and Japan's Abe in 2015 to resolve the issue of Korean "comfort women" -- a euphemism for women forced to work in the Japanese military's wartime brothels. "Japan does not make full efforts to resolve issues of history between our two countries, including the comfort women issue," Moon said. Moon said he has "high expectations" for the upcoming summit with Trump next week and said the priority the two leaders have placed on North Korea has raised the possibility the nuclear issue will be resolved. "I'm very glad that President Trump has made the resolution of North Korea's nuclear issue as top of his priority list on his foreign affairs agenda." (Additional reporting by Jack Kim and Christine Kim in Seoul; Editing by Bill Tarrant)