South Korea Exchanges Artillery Fire With North

South Korea returned artillery fire after North Korea lobbed shells over the two countries’ western sea border, pushing tensions to their highest in months.

About 100 North Korean shells landed over the disputed sea border during planned live-fire drills, while South Korea fired back about 300 shells, the South’s Defense Ministry spokesman Kim Min Seok said at a briefing. Residents on the South Korean islands of Baengnyeong and Yeonpyeong were moved to shelters.

The incident yesterday came a day after North Korea said it may conduct a “new form” of nuclear test, and after South Korea President Park Geun Hye in a speech last week in Germany proposed building closer links with the North to spur reunification. North Korea fired artillery shells at Yeonpyeong in November 2010, killing two marines and prompting South Korea to return fire and mobilize fighter jets.

“North Korea is refusing to be dragged into plans led by the South, and is indirectly saying that Park’s plan won’t be easy to implement,” Kim Yong Hyun, a professor of North Korean studies at Dongguk University, said by phone. “Firing toward the border and creating a crisis situation isn’t an unusual move, it has been part of their brinkmanship policy.”

North Korea began its drills around 12:15 p.m. local time and continued until 3:30 p.m. in seven different sea areas, the Defense Ministry’s Kim said. North Korea fired about 500 shells in total, he said.

“Our military judges that North Korea fired the shells as an attempt to gain the leading role in South-North Korea relations, and also to test our military’s determination to defend ourselves,” Kim said. “Our military is strengthening surveillance over all areas and monitoring North Korean military movements.”

Evacuation Order

At least 3,000 residents of Baengnyeong island moved to shelters, the island’s civil defense corps said. The evacuation order for Baengnyeong and Yeonpyeong was lifted at 4:30 p.m., the Korea Economic Daily reported, citing the local government.

The won rose 0.4 percent to 1,064.70 per dollar in Seoul, a three-week high, as exporters sold dollars and investors focused on a widening current-account surplus. Defense stocks Speco Co. and Victek Co. (065450) surged 15 percent and 14 percent respectively.

U.S. Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, told reporters during a trip to Israel that the incident was “another in a cycle of North Korean provocations.”

“My assessment, such as it is from a distance here, is that they didn’t get the response they were looking for” from firing missiles into the ocean so “they conducted this most recent provocation by shooting artillery,” he said.

‘Acted Responsibly’

“The Republic of Korea appears to have acted responsibly and proportionately,” Dempsey said of South Korea.

North Korea had fired at least 86 rockets since Feb. 27 before yesterday, including ballistic missiles banned under United Nations resolutions. The country’s foreign ministry defended them as part of drills to respond to annual U.S.-South Korean military exercises, according to a statement published by the official Korean Central News Agency.

Kim Jong Un’s regime “is fully ready for next-stage steps which the enemy can hardly imagine in case the U.S. considers them as a ‘provocation,’” the foreign ministry said in the statement. “It would not rule out a new form of nuclear test for bolstering up its nuclear deterrence.”

South Korea sees no sign of an imminent nuclear test or long-range missile firing, Unification Ministry spokesman Kim Eui Do said in a briefing yesterday. North Korea has conducted three atomic tests, the latest in February last year.

Family Reunions

North Korea’s warning came even as Park pushes for closer ties. Last month the two nations held the first reunions in more than three years of families separated by the Korean War. The North rejected the South’s offer this month to make family reunions a regular event.

South Korea last week repatriated a North Korea fishing boat that drifted across the disputed western sea border with engine trouble, South Korean Joint Chiefs of Staff spokesman Eom Hyo Sik said by phone on March 28.

North Korea criticized South Korea for “capturing” the boat, threatening revenge, KCNA said yesterday, citing a military official.

The 2010 shelling of Yeonpyeong took place seven months after the torpedoing of South Korea’s Cheonan warship, killing 46 sailors. An international panel blamed the sinking on North Korea, a charge it has denied.

“Both sides need to make efforts not to escalate the situation as a small conflict can develop into serious one,” Yang Moo Jin, a professor at the University of North Korean Studies in Seoul, said by phone yesterday. “North Korea may be using the drills to highlight the instability of the western sea border, and to press the South toward negotiations.”

To contact the reporters on this story: Cynthia Kim in Seoul at ckim170@bloomberg.net; Shinhye Kang in Seoul at skang24@bloomberg.net; Seyoon Kim in Seoul at skim7@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net; Stuart Biggs at sbiggs3@bloomberg.net Stuart Biggs

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