Observer

REPORTS OF THE arrest of Yang Bin, the designated head of North Korea's Sinuiju special administrative region, do not augur well for the capitalist enclave. To put it mildly, Sinuiju has teething problems.

When Deng Xiaoping proposed 'one country, two systems' as the formula for resolving the problem of Hong Kong's future 20 years ago, China was so bold as to say that this proposal would be useful for resolving other international issues.

Few probably remember this, and I certainly did not think of it as much more than an empty boast at the time. But now, it seems, North Korea has chosen this formula.

Two weeks ago, Pyongyang announced that it had designated Sinuiju, on the China border, as an SAR with a high degree of autonomy and its own executive, legislative and judicial powers. Like Hong Kong, the North Korean SAR is to have a lifespan of 50 years.

There was some confusion as to whether Sinuiju was to be an SAR or a special economic zone, similar to Shenzhen, which enjoys economic but not political privileges.

When China set up four special economic zones two decades ago, they were located near capitalist regions. Shenzhen is next to Hong Kong, Zhuhai adjacent to Macau, and Xiamen and Shantou face Taiwan. Now, North Korea has situated its SAR across the border from the city of Dandong.

North Korea has made it clear that Sinuiju is to be an SAR. In the 1990s, the Rajin-Sonbong free economic trade zone was launched, but it failed to take off. Pyongyang evidently decided to go even further than China in freedom for its SAR. While the chief executives of China's SARs must be Chinese nationals, North Korea appointed a foreigner as the head - Yang, a Chinese businessman and Dutch national.