Has "citing" been used properly and clearly here?

It is badly written, and there is no such word as Skorean, which ought to have been rendered South Korean or at the least, S. Korean--but citing has been used appropriately.

Thanks.
According to your opinon, I rewrote it as following:
The behavioral pattern of North Korea, as described by South Korean experts, is much like that of a schizo patient, citing the example that North Korean government released the detained South Korean employee and then several days later, without warning, discharged the Imjin dam to kill six innocent South Korean citizens. But technically speaking, Kim Jung Il is not a psycho, only his behavior is that of a psycho.

Do you think the rewritting acceptable?

Yes, you re-wrote it well. If this is from a newspaper article, one definitely does not want to use abbreviations such as NK, which would be acceptable in a blog--somewhere online--but not in print. There is only one thing i would change about your rewritten text (which, once again, you did very well):

" . . . citing the example that the North Korean government . . . "

"schizo patient" and "psycho" are crude and unacceptable slang. Also "behaviour" is better than "behavioural pattern".

The behaviour of North Korea, as described by South Korean experts, is much like that of a mentally ill person. [...] But technically speaking, Kim Jung Il is not mad, only his behavior is that of a madman.

... and then several days later, without warning, discharged water from the Imjin Dam to kill six innocent South Korean citizens.