North Korea and China are said to be planning the construction of a joint distribution center in the North Korean border city of Sinuiju.

Sources close to the matter in China's Shenyang said Sunday that Pyongyang had proposed the plan to Beijing and that discussions are under way, adding that the North had already signed an investment treaty with a Chinese company.

A Korean-Chinese trader said that two-way trade volume is increasing by the day but that the current Sinuiju facilities cannot handle further growth.

China is expected to provide the funds and supplies for construction of the new facilities while the North will secure labor and the site.