North Korea and China have reportedly agreed to begin next year a five-year project to jointly develop the North Korean cities of Najin and Seonbong.

According to sources in Beijing, North Korea and China recently signed a memorandum of understanding on jointly developing wharfs, roads and oil refinery facilities in the two North Korean cities.

The sources said that China will finance the three-point-five-billion dollar project, while North Korea will supply the land and labor forces.

North Korean leader Kim Jong-il and Chinese President Hu Jintao agreed on the joint development of the two North Korean cities when Kim visited China in May. North Korea then set up a committee in charge of the joint venture in July.