If the two countries really break off diplomatic relations, what will be the economic impact on both sides?

Direct impact:

China and South Korea have a long-standing economic relationship. China is South Korea’s largest export market. China’s severing of diplomatic relations with South Korea will inevitably lead to an economic blockade. The state of "closing off the country" towards South Korea.

The first is the "Korean Wave" that has been popular for a long time. It is well known that the entertainment industry is at a low economic level in South Korea. It seems that apart from electronic companies such as Samsung, the export of the entertainment industry is what supports the Korean economy. At present, the economies of China and South Korea are in a stalemate. If THAAD is deployed successfully, the restrictions on South Korea will continue to be powerful. Without China's pressure, the South Korean economy may not be able to support it. Although the restriction on South Korea is in the name of the present, it is not a comprehensive ban. China still hopes that South Korea will "step back from the brink" at the last moment.

The second is "tourism". Korean tourism caused by the Korean Wave has also made a huge contribution to the Korean economy. In 2015, there were nearly 120 million outbound Chinese tourists, and this number is expected to increase to 200 million by 2020. Obviously, tourism operators around the world want to compete for such huge dividends. In fact, in recent years, places such as South Korea, Japan, Taiwan, and Hong Kong have become favored by mainland tourists, and they have indeed benefited from this.

However, some places may have experienced a significant decrease in Chinese tourists since last year, because the Chinese authorities are developing their own tourism industry and reducing outbound tourists. This is an attempt to weaponize tourists. It seems that South Korea has become one of the countries targeted by this tactic of China. Previously, South Korea decided to deploy the "THAAD" system and sign a "Military Intelligence Protection Agreement" with Japan, which led to tense relations between South Korea and China. Korean tourism industry insiders in Beijing revealed that the Korean market is now missing out on a large number of Chinese tourists.

There is also manufacturing. Especially Korean cosmetics. After South Korea began deploying THAAD, China has strengthened customs inspections. In 2016, 28 categories of cosmetics exported were judged to be substandard products, 19 of which were Korean products. The Korean cosmetics industry stated that China has strengthened inspections of imported cosmetic ingredients since the second half of 2016.

More than half of the customers in the cosmetics industry are Chinese. The deterioration of Sino-South Korean relations has made the market worried about the long-term development of the industry. Cosmetic company stocks have been heavily sold and stock prices have also fallen. In the two trading weeks after the announcement of the THAAD decision, the share price of South Korean cosmetics company Amore fell 4.5%.

For China, workers in Korean-owned enterprises may face a wave of unemployment, and the economy will also suffer losses, but compared to South Korea, it is nothing to worry about.

Indirect impact:

If China and South Korea break off diplomatic relations, other countries such as the United States and Japan will definitely not sit idly by and ignore it. They will definitely unite with South Korea to put pressure on China. If other countries also take advantage of this This will "take advantage of the situation" in China's economy. Then, China's economy may really face a crisis.

However, China’s current economic strength is such that even the United States does not dare to act rashly. Trump has not taken action against China until now. From the current point of view, the possibility of severing diplomatic relations is very small, but if South Korea persists, It is not impossible for China to pursue its own interests.