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China rejects North Korea's law on economic zone near border
SEOUL, Jan. 11 (Yonhap) -- China has rejected North Korea's law on developing two islands near their shared border over the lack of business-friendly elements, a source familiar with the issue said Wednesday.

   The move came after the isolated country announced a law on Hwanggumphyong and Wihwa islands last month as part of its attempt to turn them into an economic zone to boost ties with its giant neighbor and develop its external economic relations.

   The two border islands that sit at the estuary of the Yalu River have long been tapped as a joint economic development zone between the two allies.

   China said the law was not business-friendly, telling North Korea that the law had some problems regarding taxes, accounting, remittance of profits and stability of investment.

   The North could soon announce a new law on developing the two islands as the two neighbors are in talks on the issue, according to the source, who has knowledge on North Korea's economy.

   The source added that the North could include business-friendly elements in its new law.

   Last year, North Korea and China broke ground on Hwanggumphyong Island to develop it into an economic zone, a move that came on the heels of then North Korean leader Kim Jong-il's trip to China to study the neighboring country's economic development.

   Kim suddenly died of heart attack last month, but the North has said it will uphold the policies of its late leader to help achieve a thriving socialist country under the leadership of his son, Kim Jong-un.

   China has been trying to lure its impoverished ally to embrace the reform that lifted millions of Chinese out of poverty and helped Beijing to become the world's second-largest economy.

   In 2002, the North designated Sinuiju, just across from the Chinese border city of Dandong, as a special economic zone, but the plan fell through after Beijing arrested its governor, Yang Bin, a Chinese-Dutch entrepreneur, on bribery and kickback charges.

   entropy@yna.co.kr
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