Beijing, Apr 3: China's central bank has warned lenders to be on guard against counterfeit US0 notes, in a move that could signal the latest irritant in the relationship between North Korea and Beijing, its most important ally.
The statement from the People's Bank of China did not specify the origin of the fake bills, but said they came from outside China and referred to them as ''supernotes'' -- the word the U.S. government uses for the high-quality counterfeit money it says is printed by North Korea.
''These fake American notes have flowed from outside across our borders. Criminals attempt to use them for money laundering activities through smuggling and trafficking,'' said the notice on the central bank's Web site.
The Communist governments of China and North Korea are seen as having a special relationship, with the two Korean War allies sharing a 1,400-km (850-mile) border and Beijing playing host to six-nation talks aimed at dismantling Pyongyang's nuclear programmes.
China provides North Korea with about 70 percent of its oil, and has hosted tours by enigmatic leader Kim Jong-il. But analysts say Beijing no longer subscribes entirely to a description of relations as being ''as close as lips and teeth''.
China is also the biggest victim of the web of illicit government-directed activities in North Korea that are thought to be a crucial source of funds keeping its impoverished and isolated government in power, they say.
The United States has been getting tough on firms it suspects of aiding Pyongyang's illegal financial activities, in one case bringing Macau's Banco Delta Asia to its knees after calling it a ''willing pawn'' of North Korea. The bank denied the allegations but cut business with North Korean entities anyway.
''We commend the PBOC for taking steps to protect its financial system from this type of abuse,'' Molly Millerwise, an official at the U.S. Department of Treasury, said in an e-mail.
''Generally speaking, the supernote is a class of counterfeit note manufactured and distributed by the government of North Korea.'' North Korea denies any wrongdoing and says it cannot return to the nuclear talks until Washington ends the crackdown on its assets.
The criminal sector may account for 35 to 40 percent of North Korea's export earnings, scholar David Asher said in a report published by the Nautilus Institute think-tank.
Others have estimated it earns tens of millions a year through illegal means and analysts say Pyongyang avoids legitimate economic activity out of fears it will lead to political change.