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The United States have installed key parts of its anti-missile defence system Terminal High Altitude Area Defense (THAAD) in South Korea, Seoul announced on Wednesday. The system was reportedly set up amid rising tensions with North Korea.

The anti-missile system was set up despite vehement protests from China, which says that the advanced system will do little to deter North Korea's nuclear ambition and will destabilise regional security balance.

The US and South Korea, however, say that the deployment of THAAD is intended to guard against increasing missile threats from nuclear-capable North Korea. THAAD is an advanced weapon system designed to intercept and destroy short and medium-range ballistic missiles during their final phase of flight.

The deployment of the missile system in South Korea has also sparked protests in the southern nation, where hundreds of residents, concerned over THAAD's potential impact on environment, took to streets, some even clashing with police. TV footage showed large trailers in camouflage paint carrying some missile-related equipment entering a golf course in the southern county of Seongju on Wednesday morning, according to AFP.

South Korean defence ministry defended the move saying that the installation was aimed at "securing operational capability of the THAAD as soon as possible." The ministry also added that its goal is to install the system completely by the end of the year.

"South Korea and the United States have been working to secure an early operational capability of the THAAD system in response to North Korea's advancing nuclear and missile threat," the ministry said in a statement. "The battery is expected to be operational by the end of the year," it added.

In an economic retaliation to the move, China has imposed a host of measures against South Korea, including a ban on tour groups which came into effect on March 15. South Korea's tourism industry has taken a huge hit, with the number of Chinese visitors dropping down by almost 40 percent last month.

China also targeted retail conglomerate Lotte, which provided the Seongju golf course site to the Seoul government for THAAD installation. According to reports, at least 85 of its 99 stores in China have been shut down.