NKorea, China to set up 10 bln dollars development fund

SEOUL, Nov 13 (Reuters) The China Development Bank and a North Korean investment group based in Hong Kong will set up a 10 billion dollars fund to help the destitute North rebuild its creaky infrastructure, a news agency reported today.

South Korea's Yonhap news agency said the deal with the North's Daepung Investment Group was reached last week.

The fund would help firms from China, which is North Korea's biggest trading partner, set up companies in the impoverished state, Yonhap quoted Daepung executive Pae Kyong-hwan as saying.

The size of the fund is 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 BD1521