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China Detains Developer of North Korean Special Business Zone


North Korea is taking unprecedented steps to open up its closed economic system, even hiring a wealthy Chinese businessman to develop a special self-governing zone inside the country to attract foreign capital. But Friday, Chinese police detained the man, shortly before he was scheduled to fly to North Korea.

Yang Bin became one of China's richest men by selling orchids to overseas buyers. Now a Dutch citizen, he runs a thriving business from Shenyang, a city in northeastern China near the border with North Korea.

Last month, the North Korean government appointed Mr. Yang to oversee development of Siniuju, a special economic zone right on the border. Mr. Yang was already in tax trouble at home, however, and on Friday the Shenyang police took him in for questioning about the situation.

Mr. Yang had given outsiders the impression that his tax problems were already solved. On Thursday, he told reporters he had made arrangements to pay Chinese authorities $1.l2 million U.S. dollars in real estate taxes by the middle of this month. Last week, Mr. Yang told reporters that Siniuju would be independent from the rest of North Korea and will have its own legal system. A Hong Kong spokesman for Mr. Yang declined Friday to comment on Mr. Yang's detention.

The Siniuju project is one of a flurry of recent North Korean openings to the outside world. James Kelly, a U.S. State Department official, is meeting with senior North Korean leaders in Pyongyang this week, even though President Bush in January called North Korea part of an "axis of evil" that included Iran and Iraq.

North Korean President Kim Jong Il hosted an unprecedented visit by Japanese Prime Minister Junichiro Koizumi last month, and admitted that North Korea had abducted a dozen Japanese citizens in the 1970s and '80s.

Sinuiju is ostensibly to be modeled on the southern Chinese city of Shenzhen, a border town near Hong Kong that grew into an economic powerhouse after China designated it a special economic zone.

Earlier this week, Mr. Yang told reporters a wall would have to be built around Siniuju so foreign investors could visit the zone without obtaining North Korean visas. He said North Korea had appointed him to a senior-level government post, a statement that has not been confirmed by authorities in Pyongyang.

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