'To me, what was even more shocking was that I found it to be one of the quietest societies I have ever been to,' said Mr Harilela, recounting his visit as a member of what was described as the first official Hong Kong business delegation to Pyongyang.

'The children swept in silence. People walked on the streets and did not seem to talk to each other. When some of us took a walk around the streets at night, people were sitting in the parks talking to one another in hushed tones.

'Maybe people were so quiet because, before the turmoil that is happening now, there were no contradictions in North Korean society. Everything was made to plan. Everything was in order.'

Mr Harilela alludes to the quiet manner in which the country is teetering on the precipice of disaster. Waves of misfortune have rocked North Korea, ranging from famines, floods and energy shortages to the way in which the collapse of the Soviet Union and China's closer ties to the West have curtailed barter trade between communist states. More change is inevitable as the regime of 'Dear Leader' Kim Jong-il, heir and successor to Kim Il-sung, takes tentative steps towards opening to the outside world.

The delegation was invited to North Korea by its Consul-General in Hong Kong, Ri To-sop, who made an overture to the Hong Kong General Chamber of Commerce at the start of the year.

Pyongyang has embarked on a flurry of diplomatic activity over the past 18 months including significant contact with South Korea. Relations have been opened with a large chunk of the Western hemisphere, even though it has not yet normalised ties with the United States and Japan.

The impressions of North Korea aired by Mr Harilela and other members of the 17-strong delegation from the chamber are coloured by China's experience of economic reforms while retaining a communist dictatorship. 'Trade and the economic prosperity that accompanies it is contagious,' said Mr Harilela.

The 'dizzying effect' of North Korea's opening to the international marketplace would lead it to become more entwined with the trading system. 'I believe that what has happened in China will happen in North Korea. I do not believe that this change will occur overnight but I do believe that it will take place over the next 10 to 20 years,' said Mr Harilela.

While the delegation was taken to Japanese garment factories by their North Korean hosts, members came across their own evidence of the nation's opening.

Chris Devonshire-Ellis, chairman of consultants Dezan Shira China Group, said he met a Russian businessman in Pyongyang who was selling tractors and receiving payment in US dollars. He also bumped into a group of fellow Britons from the City of London who were monitoring state assets which their firms were underwriting for insurance. 'International trade has started in North Korea,' said Mr Devonshire-Ellis.

The North Korean officials they met, including Finance Minister Mun Il-bong, were both candid and open when they spoke about such problems as food shortages. But officials gave the impression they were eager to attract manufacturers and exporters.

Reinforcing the Chinese perspective which delegates seemed to have been using to understand North Korea, Mr Devonshire-Ellis concluded that its foreign investment law was based on China's.

'Generally, I am pretty upbeat about the prospect of North Korea, but it's early days,' said Mr Devonshire-Ellis. 'The door is starting to open; there are risks attached.'

Though the prospect of business opportunities seemed bright, one lasting image taken back to Hong Kong by the chamber's director, Eden Woon Yi-teng, was the way in which Pyongyang was plunged into darkness at night due to energy shortages. 'It's one of the few cities I have been to where you can see the Milky Way in the middle of the night,' said Mr Woon.

The former US Air Force officer, who has worked in the Pentagon and had diplomatic contacts with Pyongyang officials, was also struck by the friendliness of North Koreans. 'I expected the society to be stern,' Mr Woon said. 'To my surprise, the people were much more friendly than I expected.'

He was also surprised that officials were prepared to admit 'problems' and 'mismanagement'. They acknowledged food shortages and said some citizens were so hungry they had to eat grass. Those Mr Woon spoke to sought to blame some of their problems on embargoes by 'hostile forces'. The US has recently lifted sanctions against North Korea but it still prevents trade in military and sensitive technology. Mr Woon believed North Korea would have difficulty reconciling its opening with a governmental system steeped in authoritarianism.

Mr Harilela felt there was little interest among North Koreans in what was happening beyond the country's borders. 'We were not stared or pointed at. People did not seem to care about the outside world,' he said.

However, the reforms inside North Korea are producing incidents which would have been unimaginable just a few years ago. Diplomats from North and South Korea attended a briefing about the visit held by the chamber at its Admiralty headquarters. North Korean officials repeatedly told delegation members about Pyongyang's dialogue with the Association of Southeast Asian Nations Regional Forum in an effort to portray their commitment to opening. The process though, is being conducted purely on the North Koreans' terms.

Delegates' mobile phones were confiscated for their 48-hour visit. And although the visitors were free to walk Pyongyang's streets, they were denied entry to a train station at night and a restaurant where locals were dining.

South Koreans based in Hong Kong who wanted to join the mission were denied visas by the North Korean consulate. A consulate spokesman said visas could not be granted to South Koreans because they had to apply through their own government in Seoul first.

Mr Harilela, whose family-run group of companies operate hotels, said he was told there was no chance of investing in North Korean hotels. 'They didn't want anybody infiltrating the service sector,' he said.

Wong Ip-kuen, chairman of construction contractor Yau Lee Holdings said: 'Dealing with them reminds me of my experience of dealing with Chinese businesses 25 years ago.'

As most businesses were actually government-owned, negotiating with representatives was time-consuming and they were usually not authorised to make any agreements. Because of their lack of authority, the representatives were unable to provide much insight or any hints about the best way to strike a deal, he said.

Banquets were provided by their hosts in sumptuous rooms and there was plenty of drinking with officials. Delegates were taken to government buildings which had Stalin-era architecture and built in large public squares.

Hong Kong investment has so far been limited. The Emperor Group opened a US$180 million hotel and casino in mid-1999 in a northern trade zone on the border with Russia and China catering mostly to mainland gamblers. Macau gambling kingpin Stanley Ho Hung-sun opened a US$30 million casino at a hotel in the heart of Pyongyang in October that year.

Exports to North Korea have risen dramatically in recent years, up from HK$234 million in 1998 to $534 million last year. However, the vast bulk of the goods are re-exports passing through Hong Kong, worth $217 million and $516 million respectively.

After a farewell banquet, the visitors were taken aback by a gesture from their hosts. They were given a badge of Kim Il-sung to wear on their lapels.

'One cannot buy this in any shop. It is simply not for sale. Foreigners are not supposed to have one,' said a surprised Mr Harilela. 'I wonder whether this is a sign of the opening up of North Koreans to foreigners, a gesture that signified they were giving to the outside world a little bit of their country as we were looking to give some of ours to them.'