China bank denies reports of $ 10 bln NKorea fund

BEIJING, Nov 13 (Reuters) The China Development Bank denied today that it had any part in a reported 10 billion dollars fund to help destitute North Korea rebuild its creaky infrastructure.

South Korea's Yonhap news agency said today that the China Development Bank and a North Korean investment group based in Hong Kong would establish the fund to help firms from China set up companies in the impoverished state.

''The report is completely groundless,'' an official with the bank's news office told Reuters. ''We have no plan to set up any such fund with North Korea.'' China Development Bank is one of China's three ''policy lenders'' that make loans explicitly to further government policies.

Yonhap had said the deal was reached last week and it quoted executive Pae Kyong-hwan of the North's Daepung Investment Group.

The size of such a fund would be a little less than half of what South Korea's central bank estimates to be the size of the North's yearly economic output -- some 23 billion dollars.

REUTERS SKB RAI1727