North Korea to Create New Economic Zone

Posted June 6th, 2011 at 8:05 pm (UTC-5)
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North Korea says it will set up an economic zone on two islands on the border with China.

The North Korean official news agency KCNA made the announcement Monday, a few days after the country's leader Kim Jong Il returned from a trip to China to study its economic development.

The news agency says the North Korean Supreme People's Assembly had issued a decree setting up the Hwanggumphyong and Wihwa Islands Economic Zone in order to boost friendship with China and expand and develop external economic relations. It says the zone will be under North Korean sovereignty.

The two islands lie in the estuary of the Yalu river, which runs along the Chinese-North Korean border. The islands have long been tapped as a joint economic development zone between North Korea and China, South Korea's Yonhap news agency said.

Mr. Kim visited China last month, his third trip there in just over a year. China is North Korea's closest ally and its largest aid donor.

Chinese Premier Wen Jiabao said Mr. Kim was invited to learn from China's economic development.

North Korea is one of the world's most impoverished countries, mostly due to its mismanaged state-run economy. Droughts and floods in recent years have created food shortages that have made North Korea dependent on international food aid.