The state-owned Yanbian Haihua Group bought the rights to use two wharves at Chongjin port, on North Korea's east coast, for 30 years after setting up a joint venture company worth $7.83 million, the Global Times daily reported.

The port, on the Sea of Japan, which is known to Koreans as the East Sea, is close to the Rason economic zone, near North Korea's borders with Russia and China.

Impoverished North Korea is striving to revitalise its economy through foreign investment in its economic zones, while China, its sole major ally, has repeatedly urged the country's leaders to open up to the world.

The two countries agreed to push forward the development of special North Korean economic zones near the Chinese border when new leader Kim Jong-Un's uncle Jang Song-Thaek visited Beijing last month to beef up economic ties.

Jang -- the husband of late leader Kim Jong-Il's sister Kim Kyong-Hui -- is seen as a key figure in the North's power elite who supports the young and inexperienced Jong-Un, believed to be in his late 20s.

South Korean news agency Yonhap said in February that China would invest about $3 billion (2.4 billion euros) in developing a free trade zone around the northeast port of Rason bordering China and Russia.

North Korea and China are jointly also developing the Hwanggumphyong and Wihwado zone on two islands in the estuary of the Yalu river that marks their border. Ground was broken in December.

The North this week responded to Seoul's offer, made following devastating floods in June and July, by asking the South to present more details of its proposal.

On Tuesday the South sent a list of aid items it was offering its neighbour, including 10,000 tonnes of flour, instant noodles and medicine.

But the following day the North suddenly changed its stance, saying it would not accept "such aid", a ministry official told AFP.

The official added that the list of supplies had not included rice -- a key issue in an earlier refusal of aid.

Last year Pyongyang spurned an offer of emergency supplies from South Korea and demanded rice and cement instead. South Korea refused, citing suspicions that it would be diverted to the military.

The South made its aid offer last week -- the first such proposal since ties with Pyongyang sank into a deep freeze following the death of the North's leader Kim Jong-Il last December.

Tensions were further fuelled by a joint US-South Korea military exercise last month that the North denounced as a provocative rehearsal for war.

The impoverished North is grappling with the after-effects of floods in June and July that killed 569 people and inundated 65,280 hectares (161,310 acres) of crop-bearing land, according to official figures from Pyongyang.

The South's government stopped its annual major food and fertiliser shipments to the North after President Lee Myung-Bak's conservative administration took office in early 2008.

Humanitarian aid by civic groups has been allowed into the country, although modest in scale.

North Korea suffers chronic food shortages, with the situation exacerbated by floods, droughts and mismanagement. Hundreds of thousands died during a famine in the mid- to late-1990s.