Despite Threats, North Korea Keeps Border Factories Open

North Korea recently cut hotline to U.S. military forces stationed in South Korea in latest series of threats, as U.S. sends stealth bombers.

A heavily armed border crossing between North and South Korea that allows the North access to $2 billion in trade a year, one of its few avenues to foreign currency, remained open on Thursday despite Pyongyang's move to cut communications.

North Korea on Wednesday severed the last of three telephone hotlines with South Korea as it readied its troops to face what it believes to be "hostile" action from Seoul and Washington. The phone line is used to regulate access to the Kaesong industrial park on the North Korean side of the border as well as for military communications with the South.

Meanwhile, the U.S. has sent two B-2 stealth bombers "for a long-duration, round-trip training mission" from their U.S. base to South Korea Thursday, its military command in Seoul said.

The nuclear-capable bombers dropped "inert munitions" on a South Korean training ground, in a mission to demonstrate the U.S. commitment and capability "to defend the Republic of Korea and to provide extended deterrence to our allies in the Asia-Pacific region," it said.

But nearly 200 South Koreans and 166 vehicles carrying oil and materials drove into the park a few miles inside the impoverished North starting at 2330 GMT after North Korean authorities used a separate phone line from the park's management office to allow access, South Korean officials said.

The North has already cut a direct hotline to U.S. military forces stationed in South Korea and a Red Cross line that had been used by the governments on both sides.

"I am a bit nervous but it looked the same as before when I went in there yesterday," truck driver Park Chul-hee, 44, told Reuters outside the Paju customs office. North Korean soldiers in and around Kaesong had been wearing combat fatigues recently, he added.

Workers and traders crossing the world's most heavily militarized border were making sure they had U.S. dollar bills for the trip, some borrowing from a co-worker to make sure they had enough of the officially accepted currency in the zone.

Pyongyang's harsh rhetoric against Washington including a vow to attack its military bases in the Pacific and to stage a nuclear strike has not yet extended to its willingness to accept dollars, which South Koreans said they had to use to buy cigarettes and other goods in the zone.

The North's move on the hotline was the latest in a series of threats in response to UN sanctions imposed after its February nuclear test and to routine military drills conducted by the South Korean and U.S. militaries.

North and South Korea are technically in a state of war because their 1950-53 conflict ended with the signing of an armistice, not a peace treaty.

The North-South military hotline was used on a daily basis to process South Koreans and vehicles across the border and in and out of the Kaesong project, where 123 South Korean firms employ more than 50,000 North Koreans to make household goods.

About 120 South Koreans remain in the park on an average day. The presence of South Koreans at Kaesong poses a potentially serious political risk for Seoul given they could be trapped if Pyongyang sealed the border.

On Thursday, 511 people in 398 vehicles are scheduled to come out of the zone, according to South Korean customs office estimates.

"I think the third nuclear test is the last tipping point. I was worried so I came out," said one South Korean who has been running a factory in Kaesong for six years and who requested anonymity due to the sensitivity of the issue.

Few people believe the North will shut down the project.

The $2 billion a year it generates reduces Pyongyang's dependency on China, which accounted for almost $6 billion in trade in 2012, according to South Korean government estimates.

Kaesong also generates more than $80 million a year in cash in wages. This is paid to the state rather than to workers.