The Chinese-born tycoon chosen to run Communist North Korea's experimental capitalist enclave has been forced to back-pedal on a promise that foreigners would be able to visit the area without visas.

The main reason is because there is no wall now

Yang Bin

The setback has contributed to mounting scepticism in South Korea about the viability of the project and the credibility of the man chosen to run it, the BBC's Seoul Correspondent, Caroline Gluck, said.

Mr Yang had said the city of Sinuiju - picked as the centre of the new capitalist zone - would grant foreigners visa-free entry from 30 September.

But in an embarrassing reversal for Mr Yang, a crowd of journalists trying to enter the city was turned away at the border.

Security problem

At a press conference in the northern Chinese city of Shenyang the next day, Mr Yang explained that the North Korean authorities wanted to seal Sinuiju from the rest of the country before allowing visa-free entry.

If these kind of problems continue, potential investors would turn back on Sinuiju

Analyst

He apologised for the delay, said Sinuiju would be open to visitors in another week's time, and added that he would ask for a temporary fence to be built while more robust defences were being planned.

"The main reason is because there is no wall now," said Mr Yang.

North Korean officials have said the easing of border restrictions would be gradual.

Southern scrutiny

Newspapers in neighbouring South Korea have responded by questioning Mr Yang's credentials.

Political analysts have also questioned whether he was the right man for the job, and warned that the project may find it hard to attract foreign investors.

"It seems that Mr Yang has been popping up surprising ideas and policies without co-ordination with pertinent authorities," said Yoon Deok-Ryong, research fellow at Korea Institute for International Economic Policy.

Dong Yong-Seung, chief researcher at Samsung Economic Research Institute said: "If these kind of problems continue, potential investors would turn back on Sinuiju."

Tax evasion claims

Mr Yang told reporters he would come to Seoul next week to promote investment in Sinuiju.

But government officials and business organisations said they had no information on his visit, Ms Gluck said.

Allegations of tax evasion and stock price manipulation surrounding the tycoon and his Hong Kong listed company, the Euro-Asia Group, have been extensively reported in the local media, she added.

Mr Yang, a Chinese-born Dutch citizen, runs an agri-business conglomerate whose interests include orchid farming.

The North Korean government's decision last month to turn Sinuiju into a capitalist enclave were among reforms to boost North Korea's poor and isolated economy.