North Korea sparks crisis over workers from South

PAJU, South Korea (CNN) -- North Korea on Wednesday stirred up fresh unease in Northeast Asia, blocking hundreds of South Koreans from entering a joint industrial complex that serves as an important symbol of cooperation between the two countries.

The move comes a day after Pyongyang announced plans to restart a nuclear reactor it shut down five years ago and follows weeks of bombastic threats against the United States and South Korea from the North's young leader, Kim Jong Un, and his government.

The fiery North Korean rhetoric, fueled by recent U.N. sanctions over its latest nuclear test, has created a tense atmosphere on the Korean Peninsula just as the United States and South Korea are engaged in joint military exercises in South Korean territory.

Pyongyang's threat last month of a possible pre-emptive nuclear strike on the United States and South Korea caused particular alarm, despite heavy skepticism from analysts and U.S. officials that the North Korean military is anywhere near capable of carrying out such an attack.

The United States has in turn made a show of its military strength in the annual drills, flying B-2 stealth bombers capable of carrying conventional or nuclear weapons, Cold War-era B-52s and F-22 Raptor stealth fighters over South Korea.

North Korea's decision Wednesday to prevent South Korean workers and managers from entering the Kaesong Industrial Complex, which sits on the North's side of the border but houses operations of scores of South Korean companies, is a tangible sign of the tensions between the two sides.

It's also a move that could end up hurting Pyongyang financially, since Kaesong is considered to be an important source of hard currency for Kim's regime.

More than 50,000 North Koreans work in the zone, producing hundreds of millions of dollars worth of goods each year. Those workers earn on average $134 a month, of which North Korean authorities take about 45% in various taxes.

The North had threatened at the weekend to shut down the industrial complex.

A 'cash cow'

"We are highly skeptical that they will close this cash cow, as some recent reports have suggested," Stephan Haggard, professor at the School of International Relations and Pacific Studies at the University of California, San Diego, wrote in an article published Monday.

"But if they did, the costs would be higher for the North than for the South," Haggard wrote in the article for the Peterson Institute for International Economics, a Washington-based research organization.

Seoul said it "deeply regrets" the North's decision to stop South Koreans from entering Kaesong.

"North Korea's action creates a barrier to the stable operation" of the complex, the South Korean Unification Ministry said in a statement, urging its neighbor to "immediately normalize" the entry and exit process.

And South Korean Defense Minister Kim Kwan-jin said military action could be taken if the safety of the South Koreans in the zone were to come under threat.

"If there is a serious situation, we are fully ready, including military measures," he said at a meeting of lawmakers, the semiofficial South Korean news agency Yonhap reported.

The North has blocked the crossing into Kaesong before.

In March 2009, also during joint U.S.-South Korean military drills that it said were a threat, Pyongyang shut the border, temporarily trapping hundreds of South Korean workers in the industrial complex.

It allowed many of the stranded workers to return to South Korea the next day, and fully reopened the border about a week later without explaining its reversal.

Hundreds of workers

It was unclear Wednesday whether the latest drama over Kaesong would play out in similar fashion.

At the start of the day, when the North informed the South that it would prevent new entries to the complex, there were 861 South Korean workers in there, according to the Unification Ministry. The North said it would continue to let people leave the zone.

Hundreds of workers rotate in and out of Kaesong each day in a series of scheduled entries and exits. Many of them stay there for several nights.

A total of 484 workers were registered Wednesday to enter the complex, the ministry said, and 446 were registered to leave.

During the late morning and early afternoon exit windows, only a trickle of workers was seen returning to South Korea from Kaesong, far fewer than the scores who were registered to leave at those times.

South Korean authorities didn't immediately provide an explanation for the discrepancy, saying the individual companies decide when to send workers back.

Kim Kyong-sin, the manager of a textile manufacturing company in Kaesong who came back into South Korea on Wednesday, said some people were staying in the complex because "they are worried they might not be able to come back in."

During the March 2009 crisis, many South Korean companies with operations in the zone chose to keep more workers there to compensate for those not being allowed in.

Kim said he was scheduled to go back into Kaesong on Thursday, but wasn't optimistic.

He said there were concerns inside the zone that the blockage at the border could cause supplies of production materials and food for workers to run out within days.

"I think if this continues there, business will be affected," Kim said. "I think the damage will be serious."

Kerry calls North 'reckless'

U.S. and South Korean officials have kept up their criticism of the North's actions in recent days.

John Kerry, the U.S. secretary of state, warned Tuesday that the United States will not accept North Korea as a "nuclear state."

"The bottom line is simply that what Kim Jong Un is choosing to do is provocative. It is dangerous, reckless," Kerry said during a joint briefing in Washington with South Korean Foreign Minister Yun Byung-se.

"And I reiterate again the United States will do what is necessary to defend ourselves and defend our allies, Korea and Japan," Kerry added. "We are fully prepared and capable of doing so, and I think the DPRK understands that."

DPRK is short for Democratic People's Republic of Korea, the official name for North Korea.

The North has said that its nuclear weapons, which it describes as a deterrent, are no longer up for negotiation.

Kerry's comments came hours after Pyongyang's declaration that it would restart the reactor at its Yongbyon nuclear complex.

The statement demonstrated Kim's commitment to the North's nuclear weapons program that the international community has tried to persuade it to abandon.

Crisis has 'gone too far'

The North Korean announcement was followed by a plea for calm from U.N. Secretary-General Ban Ki-moon, who is South Korean.

"The current crisis has already gone too far," he said in a statement from Andorra. "Nuclear threats are not a game. Aggressive rhetoric and military posturing only result in counteractions, and fuel fear and instability.

"Things must begin to calm down, as this situation, made worse by the lack of communication, could lead down a path that nobody should want to follow."

On Tuesday evening, U.S. Defense Secretary Chuck Hagel spoke with Chinese Minister of National Defense Gen. Chang Wanquan, the Pentagon said.

China is a key ally of North Korea, but it has expressed disappointment and frustration with some of Pyongyang's recent actions. It supported the U.N. Security Council's tougher sanctions on Kim's regime last month.

"The secretary emphasized the growing threat to the U.S. and our allies posed by North Korea's aggressive pursuit of nuclear weapons and ballistic missile programs and expressed to General Chang the importance of sustained U.S.-China dialogue and cooperation on these issues," Pentagon Press Secretary George Little said.

During the saber-rattling of the past few weeks, Pyongyang has severed a key military hot line with Seoul and declared void the 1953 armistice that stopped the Korean War.

This week, the United States positioned two warships and a sea-based radar platform near the Korean Peninsula to monitor North Korean military moves, defense officials said.

Seoul, meanwhile, on Monday warned that any provocative moves from North Korea would trigger a strong response "without any political considerations."




CNN's Kyung Lah reported from Paju, South Korea, and Jethro Mullen reported and wrote from Hong Kong. CNN's Judy Kwon in Paju; K.J. Kwon in Seoul; Tim Schwarz in Hong Kong; Barbara Starr and Elise Labott in Washington; and Chelsea J. Carter in Atlanta contributed to this report.