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New York Times

SEOUL, South Korea - South Korea said Friday that it was pulling out the 175 remaining factory managers from a jointly operated industrial park in North Korea, deepening doubts over the survival of the only remaining symbol of cooperation between the two countries amid a tense standoff over the North's nuclear program.

Once billed as an important experiment for Korean reunification, the factory complex across the border at Kaesong exposed North Korea to capitalism, pairing the South's manufacturing skills with cheap North Korean labor. The park opened in 2004.

The decision to effectively close the 123 factories there is an indication of how fraught relations between the two nations have become in recent months. The South had preserved the Kaesong complex even when it cut off all other trade ties with the North after the sinking of one of its warships in 2010. That episode killed 46 sailors, and the South blamed the North. North Korea had also continued its support of the plant, which provided badly needed hard currency, through previous diplomatic crises.

"The Kaesong complex fell victim to a war of nerves between the new leaders of both Koreas who don't want to be seen as weak," said Kim Yong Hyun, a professor of North Korean studies at Dongguk University in Seoul.

North Korea had already removed its 53,000 workers this month as part of an escalation of threats after the United Nations imposed sanctions to punish the North for its nuclear test in February. The North's leaders cited the danger of war it said was posed by joint South Korean-U.S. military drills. It also blocked supplies and personnel from the South, forcing all the factories to stop production. Most South Korean managers at the plant returned home, but some stayed in the hopes relations would improve.

The decision to withdraw the managers came hours after North Korea rejected the South's proposal for talks on the park's future. South Korea said the situation was becoming untenable because the North was no longer letting food and medicine be shipped to the site.