A Chinese state company plans to inject about $2 billion into a project to build up a North Korean free trade zone into a regional export base, a report in South Korea said Friday.

China 's Shangdi Guanqun Investment, which signed a memorandum of understanding with Pyongyang 's Investment and Development Group Dec. 20, would provide the capital, the JoongAng Ilbo newspaper said.

The two sides hope the zone in Rason near the North's border with China and Russia would be the biggest industrial zone to be built in northeastern Asia in a decade, the daily said, citing documents related to the deal.

Recent reports have suggested that China is considering offering the North more economic aid if it agrees to return to six-nation nuclear disarmament talks chaired by Beijing .

Pyongyang issued a decree in January to upgrade the status of Rason, formerly Rajin-Sonbong, which became a special economic zone in 1991 but never fulfilled its proposed role as a transportion hub.

The deal was described as a strategic joint project based on trust between top Chinese and North Korean officials, the daily said.

North Korean leader Kim Jong Il visited facilities in and around the ports of Dalian and Tianjin during his trip to China last year, and met Chinese President Hu Jintao.

The project also calls for the construction of coal-fired power plants, roads, piers and an oil refinery in Rason, the daily said.

It quoted an unnamed Shangdi Guanqun Investment official as saying, "We have a deep interest in North Korea 's ample natural resources."

Shangdi Guanqun Investment is a state company specializing in oil processing, natural resources and financial services. Its North Korean partner is in charge of developing free trade zones.

The isolated communist country has been cautious in opening its doors to the outside world. But it has strived to revitalize Rason through cooperation with China and Russia .

China , Pyongyang 's sole major ally, has actively explored investment opportunities in North Korea and secured the rights to much-needed natural resources such as iron ore and coal.

Διαβάστε ακόμα