Chinese detain boss of North Korea's Sinuiju

SHENYANG, China -- The new but already stumbling special economic zone in Sinuiju, North Korea, suffered another setback Friday when Chinese authorities detained Yang Bin, the Chinese-born businessman recently appointed by North Korea to run the experiment in capitalism. Chinese police said Mr. Yang had been confined to his home after initial questioning.

A Shenyang police source asserted that part of the reason for Mr. Yang's arrest was a desire by the Chinese government to derail the development of the new North Korean zone.

Thirty Chinese policemen descended on Mr. Yang's house here at 5 a.m.; other staff members at his flagship company, Euro-Asia Agriculture, were also detained for questioning.

The charges against Mr. Yang were not made public; the state-run China News reported only that he was suspected of illegal business practices. Sources familiar with his firm said they believe Mr. Yang is suspected of stock speculation, tax evasion and illegal real estate development.

Mr. Yang owed a large sum for real estate taxes to the city of Shenyang, and was under pressure to pay off the delinquency. He had pledged to pay 10 million yuan ($1.2 million) by next week.

A spokesman for the Euro-Asia Agriculture Group said Mr. Yang's detention was linked only to the tax payment delinquency, dismissing speculation of political problems. "We have raised enough money to pay the back taxes by selling company shares last week, so we should have no problem after the payment," a company source said.

Whatever the reason for Mr. Yang's detention, his nationality kept him from a long detention. "Since Mr. Yang is a foreigner, he can be held no more than 24 hours under Chinese criminal law," a police official in Shenyang told the JoongAng Ilbo.

Mr. Yang obtained Dutch citizenship in 1980s.

"But after his release Saturday, he can be detained again if the initial investigation supports the charges," the source added.

Mr. Yang was also prohibited from leaving China, shortly before his scheduled departure for Sinuiju, where he was named the head of the city's economic, political and legal system.

"Banning Mr. Yang from leaving China is a complicated diplomatic matter, so I must speak carefully, " another Chinese police official said. "Mr. Yang, even after his release, will probably face difficulty in going to Sinuiju or Pyeongyang, since what China has in mind is blocking the North from developing Sinuiju as a special capitalist zone at all cost."

The North Korean Consulate in Shenyang said it was not informed of Mr. Yang's arrest by the Chinese authorities. The mission bluntly voiced anger about its ally's detention of the man chosen by its Dear Leader, Kim Jong-il.

"Mr. Yang may have talked big to the Chinese government, but [detention] is still too much," a North Korean diplomat said.

Only two weeks ago, North Korea announced its plan to foster the northwestern port city as a special administrative zone as a part of its recent economic reform drive. Mr. Yang was quickly named the governor of the zone.

by Jin Se-keun