By Damian Grammaticas BBC correspondent in Pyongyang

A Chinese businessman has been chosen to become the chief executive of Sinuiju, a special administrative region created along North Korea's border with China.

The businessman, Yang Binn, says he will run the area along capitalist lines, creating a free-wheeling capitalist enclave similar to Hong Kong.

He plans to move more than 500,000 people from the 132 square kilometre area along North Korea's border with China.

There will be a new legal system, possibly based on European law.

There will be elections to a legislature and administrators and judges hired from foreign countries, including the West.

Window to the world

For the hardline socialist state of North Korea, the scope of these changes is unparalleled.

Mr Yang, a Chinese business tycoon, has been hand-picked by North Korea's leader, Kim Jong-Il.

Mr Yang said Mr Kim had created the project as a window for the rest of the world to see that North Korea is experimenting with change.

However, a wall will be built to keep North Koreans out of the self-governing capitalist zone.