Seoul - Angered by Seoul's harder line against its neighbour, North Korea is restricting access to a jointly operated industrial zone near the border, as both sides suffer the effects of politics and external economic factors.

Pyongyang put new limits on the number of South Korean workers who could be employed in factories at Kaesong, which has contributed to a decline in orders received by South Korean-owned firms that are suffering from currency depreciation at the same time.

As the future of the 88 South Korean factories at Kaesong darkens, Pyongyang is itself faced with the problem of how to keep the
37,000 North Korean workers employed if the special industrial zone shrinks, or fails.

Seoul - South Korea's top diplomat said Friday that despite North Korea's backsliding at the international negotiations over giving up its nuclear weapons, the six-party talks still remain valid.

"It is still premature for us to say all of our efforts at the six-way talks ended up a failure," said Foreign Minister Yoo Myung-Hwan in a forum with lawmakers. "So it's premature for us to doubt the validity of the six-way talks."

The collapse of the latest round of talks, involving China, Japan, Russia, the United States and the two Koreas, which ended Thursday in Beijing, denies a diplomatic trophy to the lame-duck administration of outgoing US President George W Bush.

Seoul  - Leading shareholders of money-losing Hynix Semiconductor Inc on Friday denied market rumours of a Hynix capital reduction.

Instead, they revealed a possible attempt to raise capital for the world's second-largest manufacturer of computer memory chips after Samsung Electronics Co.

Creditors said that despite the revenue loss, Hynix stands on a risk-free capital base that may invite a capital raise.

"We've never discussed capital reduction," the shareholders' committee said in a statement.

Hynix has been talking with its five top shareholders, who own 36 per cent of its shares, among them the Korea Exchange Bank and the Korea Development Bank.

Seoul  - South Korean GDP growth is expected to slow down from the 3.7-per-cent forecast for 2008 to 2 per cent in 2009, the central bank said Friday.

The central Bank of Korea (BoK) blamed the global economic downturn - which has curtailed the country's exports and cut down domestic consumption - for the lowest growth forecast since 1998.

"The Korean economy is unlikely to recover its growth momentum before 2010 as it undergoes a slowdown both in exports and domestic spending amid the global economic recession," said Kim Jae-Chun, a senior official at BoK.

The current account forecast by the BoK predicts a reversal from a deficit of 4.5 billion dollars in 2008 to a surplus of 22 billion dollars for 2009.

Seoul  - Political relations on the Korean peninsula reached a new low in 2008, as insecurity over the political situation in Pyongyang and North Korea's renewed nuclear posturing raised concerns all across the region.

In early December, at the latest round of the six-party talks disbanded in Beijing, negotiators from China, Russia, the United States, Japan and South Korea struggled to reach a compromise with Pyongyang on a verification roadmap for its nuclear disarmament.

Falling back to its traditional gambit of rejecting previous agreements, North Korea dumbfounded its negotiation counterparts by refusing to have international inspectors take environmental samples at its nuclear facilities.

Seoul - The captain of the oil tanker involved in a collision with a barge off South Korea's coast in late 2007 has been sentenced to a year and a half in jail, the daily The Korea Times reported Wednesday.

The report said the first officer of the Hong Kong-registered tanker Hebei Spirit received an 8-month jail term, with a state court in Taejon finding both having been negligent in carrying out their duties.

The sentencing came in an appeals case after the two men had initially been acquitted last June.

The captain, and Indian national, and the first officer were also each fined 20 million won (14,000 dollars). The owners of the tanker and of the barge were also each fined 30 million won.