YEONPYEONG, SOUTH KOREA (BLOOMBERG) - It's troublesome when Chinese trawlers show up in the most dangerous waters off the Korean Peninsula.

It's even more alarming when they're gone.

"It's a bad omen," said Choi Ohk-sun, a 65-year-old resident on the South Korean island of Yeonpyeong.

The last time a similar phenomenon happened was a decade ago, when North Korean artillery rained down on the island, destroying homes a few minutes' walk from where Ms Choi was picking mulberries late last month.

The Chinese trawlers left the north side of the fertile fishing ground that straddles the two Koreas for a few days after Pyongyang blew up a liaison office built by Seoul and warned of further provocations.

Some worried that their exit foreshadowed another military action as tensions rose between South Korean President Moon Jae-in and North Korean leader Kim Jong Un.

On the sleepy island of Yeonpyeong, the threat of conflict is constant with North Korean coastal howitzers just 11km away and propaganda banners visible through binoculars.

There have been several military clashes in the contested maritime boundary off the west of the peninsula since 1999, making it a possible ignition point for a major conflict that could draw in the US and China - the two biggest allies for the rival Koreas.

South Korean military officials said Chinese ships had just gone missing for half-a-day on June 22 before returning.

Tensions eased about two days later after Kim suspended unspecified "military action plans" against South Korea.

The 70th anniversary of the outbreak of the Korean War on June 25 went by without incident but the worries did not abate in the village of Yeonpyeong.

The eight bomb shelters on the island serve as a reminder of the threat it faces to the north.

"Missing Chinese ships? It's taboo. We don't even talk about it," Lee Bae-rok, a seafood factory worker, said as he cleaned freshly caught crabs.

"It may bring bad luck," said Mr Lee, who lived in Yeonpyeong for 14 years.

TROUBLED WATERS

Yeonpyeong is located at the centre of five islands off in the Yellow Sea - known as the West Sea by Koreans - and is strategically located to help South Korea prevent a naval incursion.

The 1953 armistice that ended the Korean War didn't spell out a sea border, which was later drawn up unilaterally by the US commander and was contested a few decades later by Pyongyang, which wanted the line pushed further south.

The island of about 2,000 inhabitants - including hundreds of military personnel - suffered the first attack on South Korean soil since the end of the Korean War in November 2010.

North Korea shelled targets for more than an hour, killing two civilians and two marines. The flurry damaged almost 300 structures and set wooded areas ablaze.

In crab season in June, South Korean fishermen press as close as they can to the nautical border known as the Northern Limit Line (NLL) about 1.5km away.

On the other side are typically a few dozen fishing crews from China, which locals say pays North Korea for fishing rights.

North Korean naval vessels at times enter the area, adding an element of volatility to already troubled waters.

The armistice agreement that ended the war clearly spelled out where troops could go and provided a mechanism to sort out disputes.

But there is no such agreement around the NLL maritime border, raising the risk of misunderstanding and unintentional escalation.

Mr Kim Jong Un could be tempted to test South Korea's maritime defenses as he grows more frustrated with US President Donald Trump's refusal to relax economic sanctions on his country.

While he needs to create enough pressure to force Trump back to the bargaining table, he must be careful to avoid any actions that prompt a direct military confrontation with the more powerful US.

Over the years, North Korea has harassed South Korea's navy through incursions in their contested western seas.

In 2002, the provocations turned deadly and in March 2010, North Korea was suspected of torpedoing the South Korean warship Cheonan, killing 46 sailors.

"It has often become a flash point for inter-Korean conflicts because of its position," said John Everard, a former British ambassador to North Korea.

"While Seoul sees maintaining a military presence there as essential for asserting sovereignty over surrounding waters, Pyongyang regards this as provocative."

Mr Everard said he hoped that the latest statements from North Korea suggest that it may have decided to forgo any strike on the south for now.

"If it does launch an attack, it will take care that this is in a way that nobody expects. Surprise is important to the North," he said.

Shortly after coming into power in late 2011, Mr Kim became the first North Korean leader to visit the islands on his side of the NLL and in 2017 oversaw drills to simulate another strike on Yeonpyeong.

The official Korean Central News Agency reported that the exercises would help its troops envelop Yeonpyeong in flames and land North Korean occupying forces on its shores.

"North Korea has continued to violate the NLL and carry out armed provocations to nullify the NLL," South Korea's military wrote in its most recent defence white paper.

Locals have learnt to live with the threat.

"Hell if I care," Hwang Sam-ju, a 72-year-old farmer who came to Yeonpyeong nearly five decades ago, said when asked about North Korea's latest provocation.

"Our ordinary lives shouldn't get affected by a few words from that dictator."

"If they attack us, invade us or whatever, I will also respond," Ms Hwang said, as she stopped peeling potatoes with a knife.

"I'm not afraid."

'HOMESICK' OBSERVATORY

The island is fortified with trenches, coastal artillery batteries, warships and armoured vehicles.

Parts of the coastline are guarded with thousands of metal spikes pointing out to sea, called "Yongchi", which translates to dragon's teeth.

They are intended to stop North Korean forces from landing troops on the island.

On June 25, the war anniversary, South Korean marines trained near an area where one of their own was killed in the 2010 attack.

They rolled out K-9 Thunder self-propelled artillery that could be used if fighting resumed.

Despite the threats, however, islanders say it isn't easy to leave.

Kim Jong-gyu - an 88-year-old war veteran - said he had no other place to go.

His home town of Yeonbaek can be seen across the water.

It used to be in South Korea before the war and now its a part of North Korea.

"Wish I could get there before I die," Mr Kim Jong-gyu said at the Manghyang observatory - whose name means homesick in Korean - looking at his old home town.

The observatory contains an altar to honour ancestors who weren't able to return home and it has a poem on its altar saying "I want to be in my home town when I get old."

Mr Kim Jong-gyu has run a repair shop for vehicles since 1958, earning a few hundred dollars a months and has long been fixing broken tires on soldiers' bicycles for free.

Even though daily life is quiet, the years of worries have taken their toll.

"I still get nightmares," he said.

"Even when my wife makes a loud noise when she washes dishes, it freaks me out. I hear it as an explosion."