The South Korean government will expand the joint industrial complex in Kaesong, a border city of the Democratic People's Republic of Korea (DPRK), despite Pyongyang's missile tests earlier this month, a senior South Korean official said Wednesday.

"The Kaesong industrial complex is a project that runs strictly on the mechanism of a market system," said Goh Gyeong-bin, head of the office for the inter-Korean economic project at the Unification Ministry.

The government will begin the next phase of the Kaesong development project as early as August or September, which would include leasing out 1 million pyeong (3.3 sq.km) of land at the joint complex to South Korean companies.

Goh said that about 300 to 800 South Korean companies, depending on the size of each business, are expected to move into the joint complex when the next phase of the development plan is completed.

Goh's remarks came amid worries that the inter-Korean industrial complex might be affected as the United States alleged that the DPRK government uses part of the wages paid to DPRK workers in the complex on military programs and asked the South Korean government to suspend the project.

According to Goh, the 13 South Korean companies currently operating in the Kaesong industrial complex are paying about 500, 000 to 600,000 U.S. dollars a month to 7,862 DPRK employees.

About 2,000 South Korean companies with 500,000 DPRK workers are expected to operate in the complex by 2012 when it is fully installed, the Unification Ministry said.

Source: Xinhua