Trade between the two Koreas rose 6.4 percent in the first eight months of 2004, Seoul's Unification Ministry on Thursday, led by non-commercial business in the form of aid and subsidies from the capitalist South.
Cross-border trade between North and South Korea, which remain technically at war since the 1950-53 Korean War ended in a truce, amounted to $433 million, the ministry said in a statement.
Just over half the total came from non-commercial trade, which jumped 17.5 percent to $225.3 million. This included funding the construction of a light-water nuclear reactor in the North, subsidies for tours to the scenic Mount Kumgang resort in the North and sending relief aid such as fertiliser.
The ministry said commercial deals dipped 3.5 percent to $207.7 million during the eight months. The communist North sells agricultural, textile and metal goods to the South.
The two Koreas have pursued increasing economic co-operation since a landmark summit four years ago.
For Seoul, some of the co-operation has been driven more by politics rather than economics.
The more advanced South has been pouring capital and other relief goods into the North, which has only recently started adopting tentative market reforms in a bid to prop up its improverished economy.
One major joint undertaking is an industrial park in the North Korean town of Kaesong, which is set to open in November. The project funded by South Korean capital aims to allow companies from the South make use of the North's cheap labour.
"For the year, the inter-Korean trade figure will be lower than previous years, because we're buying 300,000 tonnes of rice from Thailand to send to the North," said a ministry spokesman.
During the first seven months of this year, trade between the two Koreas was up 9.6 percent to $374 million from a year earlier, according to the ministry. North Korea does not release official economic data.