China has formally arrested Yang Bin, the Dutch-Chinese tycoon chosen by North Korea to run a special economic zone, on charges including fraud and bribery, state media has said.

Mr Yang, who has been held under house arrest in the north-eastern city of Shenyang since early October, was arrested there on charges of "commercial crimes", the Xinhua news agency said.

Foreign Ministry spokeswoman Zhang Qiyue has said the case against Mr Yang is "completely unrelated" to his North Korean project.

But the BBC's correspondent in Beijing, Rupert Wingfield-Hayes, says there is suspicion that Mr Yang's arrest is, at least in part, politically motivated.

Mr Yang was detained early last month, about two weeks after North Korea's surprise announcement that it was setting up a capitalist-style economic zone at Sinuiju, on the border with China.

The North Korean leader, Kim Jong-il, appointed Mr Yang to take charge of the zone, reportedly angering China, which was not consulted over the appointment.

Tax deal

No information has been available on Mr Yang since he was taken from his home on 4 October.

Mr Yang built a Dutch village theme park in China

Official media have said authorities began investigating Mr Yang, China's second-richest businessman, after ordering him to pay back taxes.

Before his house arrest, Mr Yang said he had reached a deal with tax authorities to pay $1.2m.

Mr Yang, 39, was born in China but left to study in Holland in the mid-1980s and took Dutch citizenship.

He made his fortune farming orchids in China using European agricultural technology.

His corporate headquarters in Shenyang has a Dutch theme, with windmills and a reproduction of Amsterdam's railway station.

When North Korea chose him to run the Sinuiju enclave, he said it was because North Korean had grown to trust him during dealings over his investments in the poverty-stricken country's agricultural system.

North Korea created the Sinuiju Special Administrative Region on the border with China in September, to attract foreign investment and emulate trade zones which kicked off China's economic reforms in the early-1980s.

Our correspondent says Yang Bin may have deeply offended China's political masters.

Shortly before his house arrest he gave an interview in which he said the Chinese Communist Party had never given him a cent, and he owed them nothing in return.