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(2nd LD) N. Korea said to want to keep Kaesong complex running
SEOUL, May 31 (Yonhap) -- North Korea has said it wants to keep a joint industrial complex with South Korea going and will ban southern firms from taking factory equipment out of the zone, a Unification Ministry official said Monday.
An unidentified North Korean official made the remark Sunday to a South Korean staffer at a joint commission handling the operation of the factory park in the North's border town of Kaesong, the official said on condition of anonymity.
The remark represents a softening of Pyongyang's stance on the project as it contrasts with a threat to shut a cross-border route leading to the zone in anger over a series of steps South Korea announced in retaliation to the North's sinking of a southern warship.
It also appears to reflect the North's concern that the park's closure would leave tens of thousands of its workers there without jobs and the regime without a key source of hard currency that has helped prop up the North's moribund economy.
The North's threat to shut the border to Kaesong had spurred worries the regime may be trying to close the complex, the last-remaining symbol of reconciliation between the two Koreas, which are still technically at war as the 1950-53 Korean War ended in a truce, not a peace treaty.
But on Sunday, the North Korean official said the country would "continue efforts to move the Kaesong industrial complex forward" and accused the South of trying to shut down the complex, according to the ministry official.
"Responsibility lies with the South in case the Kaesong complex is closed," the North's official was quoted as saying. The official also said that South Korean factories won't be allowed to take their factory equipment out of the complex unless it is broken or on a lease.
The Kaesong project combines cheap North Korean labor with South Korean capital and technology. About 110 South Korean factories employ some 42,000 North Korean workers at the complex. Revenues from the zone have been a key source of hard currency for the impoverished North.
The project has long been plagued by political and nuclear disputes. A new wave of tension has hit the zone after North Korea was found to be behind the March 26 sinking of the South Korean warship Cheonan, which killed 46 sailors.
Weary of the zone's vulnerability, a South Korean firm has been working to set up a factory in China that could replace the one at Kaesong.
"We're establishing a factory in Guangzhou, China, though we don't have an immediate withdrawal of the Kaesong factory in mind," a company official said on condition of anonymity. "We've determined that it would be difficult to further expand" the Kaesong factory.
The company has recently invited three Chinese technicians for training at its headquarters in South Korea and at the Kaesong factory, the official said. These moves apparently unnerved North Korean officials concerned about their possible pullout.
The park was set up when reconciliation between the two Koreas boomed following the first-ever summit of the two Koreas in 2000. But their ties were badly damaged as North Korea strongly protested President Lee Myung-bak's hard-line policies on Pyongyang, including his linking of aid to progress in international efforts to end North Korea's nuclear programs.
While announcing a slew of steps to punish the North last week, Seoul kept the Kaesong complex alive, though it said the number of South Korean workers there will be cut. Other measures included halting trade with North Korea and banning North Korean commercial ships from using South Korean waters as a shortcut.
These measures are expected to hit the North's tattered economy hard, leaving the communist neighbor with an estimated annual loss of about US$260-300 million in lost revenues in trade, lost jobs and increased shipping costs, a senior South Korean official said on condition of anonymity.
South Korean managers at the Kaesong complex have also noticed uneasiness among their North Korean employees, who think that tensions might cost them their jobs, causing them to work harder, another official said, also speaking on condition of anonymity.
"Company officials said that they've found North Korean workers trying to work harder with more serious attitudes than before, probably because they hope the Kaesong industrial complex will keep going," the official said.
jschang@yna.co.kr
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