South Korea celebrity appears in Chinese ad in subtle sign of thawing diplomatic tension

Jun Ji-hyun, who has played the lead roles in hit movies and dramas such as 2013&rsquo-s &ldquo-My Love from the Star,&rdquo- featured prominently on Monday on the product page of health goods maker Mentholatum on Alibaba Group Holding Ltd&rsquo-s Taobao.com.

Jun&rsquo-s appearance comes toward the end of a year in which South Korea&rsquo-s entertainment industry suffered a drop in Chinese demand for South Korean cultural exports. The drop came as Beijing objected to Seoul&rsquo-s use of a U.S. anti-missile system, prompting popular anti-South Korean sentiment in China.

South Korean celebrities soon reported being unable to attend promotional events and having work visa applications delayed, officials at South Korean talent agencies told Reuters.

&ldquo-Chinese TV ads featuring South Korean celebrities were suddenly dropped and new ones aired with Chinese celebrities,&rdquo- said a director of a South Korean talent agency, declining to be identified due to the sensitivity of the matter.

Chinese foreign ministry spokesman Geng Shuang, at a regular briefing on Monday, said he was not aware of any restrictions on South Korean cultural exports, and that &ldquo-China will work hard with South Korea to promote the early return to the correct and healthy track of bilateral exchanges and cooperation.&rdquo-

Mentholatum&rsquo-s Asia-Pacific headquarters did not have an immediate comment. Alibaba could not be immediately reached.

In late October, Beijing and Seoul agreed to move beyond their year-long stand-off over the missile issue.

&ldquo-We haven&rsquo-t seen any immediate tangible change, but we hope the agreement will have a positive impact on future cultural exchange,&rdquo- South Korean entertainment and media firm CJ E&M Corp told Reuters.

The impact of the stand-off has been deep. K-Pop agency YG Entertainment Inc has not scheduled any concerts in China since July 2016. In its most recent earnings report, it said July-September operating profit fell 88 percent.

Peer S.M. Entertainment Co has also not scheduled a concert in China since September 2016. Its latest earnings showed a 61 percent profit drop for January-June.

But analysts expect the agreement ending the stand-off to see earnings at entertainment firms begin to recover from as soon as early 2018.

Reflecting that expectation, shares of CJ E&M rose 5.6 percent on Monday, while S.M. was up 3.9 percent and YG was 6.1 percent higher. The benchmark Kospi index fell 0.5 percent.