North Korea's hardline socialist regime has appointed a Chinese-born entrepreneur to oversee a radical experiment with free-market economics.

Local news agencies reported on Monday that Yang Bin, a 39-year old tycoon listed last year by Forbes magazine as China's second-richest man, is to run the newly-created 'special administrative region' of Sinuiju, next to the border with China.

The North Korean government aims to turn Sinuiju into a capitalist enclave in a country which has until now been cut off from the mainstream global economy.

"It will be a totally capitalist region," Mr Yang told US cable TV channel CNN.

"It will have its own legislative, judicial and executive powers without any interference from central government."

Going Dutch

Analysts have said the decision to build a free-market economy in Sinuiju underlines North Korea's determination to reform after half a century of near-total isolation.

The North Korean government's choice of chief reform strategist appears to be an astute one.

Born and brought up in China, but now a Dutch citizen, Mr Yang is the founder of a diversified business empire which has amassed him a personal fortune estimated at $900m.

He moved to the Netherlands in the late 1980s and set up a successful textile company before returning to China in the 1990s to start a horticultural business specialising in orchids.

Flower power

Through his Euro-Asia group of companies, Mr Yang now also has interests in tourism and real estate.

Last year, Mr Yang set up a joint venture horticultural company in the North Korean capital Pyongyang which may be the basis for his contacts with the country's leadership.

However, Mr Yang's fortunes suffered a temporary setback earlier this year when shares in his Hong Kong listed firm slumped amid investor doubts over its financial position.