North Korea withdrawing workers

North Korean men working for ShinWon, a South Korean clothing maker, prepare garments for production at a factory in Kaesong, North Korea, September 2012. Source: AP

NORTH Korea said overnight it was withdrawing all workers and suspending operations at a lucrative joint industrial zone with South Korea, blaming foreign "warmongers" at a time of acute tensions.

The announcement came amid reports of heightened activity at the North's nuclear test site, and at a missile battery, although the South Korean government denied suggestions that a fourth nuclear test was imminent.

North Korea "will withdraw all its employees" from the Kaesong industrial zone, Kim Yang-Gon, a senior ruling party official, said in a statement carried by the North's official Korean Central News Agency.

Pyongyang will also "temporarily suspend the operations in the zone and examine the issue of whether it will allow its existence or close it", Kim said of Kaesong, which sits 10 kilometres inside North Korea.

Kaesong was built in 2004 as a rare symbol of cross-border economic cooperation. It is a crucial hard currency source for the impoverished North, through taxes and revenues, and from its cut of the 53,000 workers' wages.

Turnover in 2012 was reported at $US469.5 million ($450.90 million), with accumulated turnover since 2004 standing at $1.98 billion.

But Pyongyang has blocked South Korean access to Kaesong since Wednesday, forcing 13 of the 123 South Korean firms operating to halt production.

South Korean army soldiers on a military truck move during an exercise against possible attacks by North Korea in Pocheon, South Korea, near the border with North Korea, April 8, 2013.

South Korea's unification ministry said the unilateral withdrawal "cannot be justified in any way and North Korea will be held responsible for all the consequences".

"The (South) Korean government will calmly but firmly handle North Korea's indiscreet action and we will do our best to secure the safety of our people and the protection of our property," a ministry spokesman said.

More than 300 South Koreans have left Kaesong and returned to the South since North Korea banned access last week. The unification ministry said 475 South citizens were still staying at the complex as of Monday.

"How the situation will develop in the days ahead will entirely depend on the attitude of the South Korean authorities," said Mr Kim, who blamed the pull-out on "military warmongers" who had affronted the North's "dignity".

The Korean peninsula has been locked in a cycle of escalating military tensions since the North's third nuclear test in February, which drew toughened UN sanctions.

The South's defence ministry said Monday that activity detected at the North's Punggye-ri atomic test site was "routine" and should not be interpreted as final preparation for another detonation.

"There is no indication that a nuclear test is imminent," ministry spokesman Kim Min-Seok said, while adding that the North consistently maintained Punggye-ri at a state of test-readiness.

The South's unification minister had appeared to confirm a report by the JoongAng Ilbo daily, which cited intelligence reports of stepped-up activity at the site. But he then insisted his remarks had been misinterpreted.

North Korea's bellicose rhetoric has reached fever pitch in recent weeks, with near-daily threats of attacks on US military bases and South Korea in response to ongoing South Korea-US military exercises.

Cho Han-Bum, an analyst at the Korea Institute for National Unification in Seoul, said the Kaesong withdrawal was consistent with North Korea's time-honoured brinkmanship.

"Politically it's a very dangerous decision to make for the North," he said, noting that tens of thousands of North Koreans depend on the wages earned in the zone.

"I still don't believe that the North is genuinely serious about shutting Kaesong permanently. By saying its future depends on the behaviour of South Korea, it's leaving room open for negotiation," he said.

Intelligence reports suggest Pyongyang has readied two mid-range missiles on mobile launchers on its east coast, and plans a test-firing before the April 15 birthday of late founding leader Kim Il-Sung.

A missile launch would be highly provocative, especially given the strong rebuke the North's sole ally China delivered on Sunday.

"No one should be allowed to throw a region, even the whole world, into chaos for selfish gains," President Xi Jinping told a high-powered business forum in southern China.

The United States, which has met the North's threats with some military muscle-flexing of its own, offered a calibrated concession Saturday by delaying a planned inter-continental ballistic missile test.

Russian President Vladimir Putin on Monday welcomed the decision to postpone the Minuteman 3 test, which the US had said it feared could be misconstrued as an attempt to exacerbate the air of crisis.

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