South Korea's decision to deploy an anti-missile defense system could curb cruises from China, Korea's biggest inbound market for cruise tourism.

The Chinese government has told travel agencies in China not to sell travel to South Korea, following selection of a golf course in the southeast of the Korean peninsula for deployment of the U.S.-designed Terminal High Altitude Area Defense system.

The system is meant to defend against short- and medium-range ballistic missiles. North Korea, whose most important ally is China, has been increasingly active in testing new ballistic missiles.

According to the Korea Herald, South Korea's largest English-language newspaper, of the 43 scheduled calls this year by cruise ships at Incheon, South Korea, 30 originate in China.

The Chinese government has the power to order Chinese travel companies to stop selling cruises to Korea. Major cruise companies such as Royal Caribbean International and Costa Cruises sell mostly on a wholesale basis in China to large travel agencies.

"There is a very tight licensing and regulatory control over travel agencies [in China,]" said Dwain Wall, a travel agency executive and consultant familiar with the Chinese market. In the short-term, Wall said that Chinese agencies and their cruise line partners are revising itineraries to shift ports of call from South Korea to Japan.

"It does impact cruise, but it's low season -- thank God -- and they've been sort of able to regroup and change the ports to Japanese ports," Wall said.

If the travel ban persists into the busier summer months, it could reduce demand for cruises from northern China, which go mainly to Japan and South Korea, Wall said.

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