North Korea lashed out at a Chinese company that had complained of corruption and fraud in a multi-million dollar investment in the reclusive state, and accused the Xiyang Group of reneging on its deal.
The statement, carried on Wednesday by the North Korean state news agency KCNA, came at a sensitive time for the North as it seeks Chinese investment to revive its moribund economy and as its new leader Kim Jong-un has asked for a state visit to China, its main backer.
Xiyang Group, on a Chinese website, described its investment in an iron-ore powder venture as "a nightmare" and said that the North had violated its own investment laws.
"It (Xiyang) has carried out only 50 percent of its investment obligations though almost four years have past since the contract took effect," KCNA quoted a spokesman for its Commission for Joint Venture and Investment as saying.
North Korea rarely criticizes China or any Chinese entities in public, and the KCNA article said that the Xiyang comments had been whipped up by "hostile forces" in an orchestrated media campaign to blacken the country's name.
North Korea's special economic zones are governed by a patchwork of laws and have so far failed to attract large amounts of Chinese investment into a country that has been hit with international sanctions after its nuclear tests in 2006 and 2009.
The country sits on significant deposits of coal, iron ore and gold and has substantial reserves of rare earths. But a rickety infrastructure and uncertain laws deters investors.
Between 2003 and 2009, Chinese investment in North Korea stood at $98.3 million, just 12 percent of the amount Chinese firms have invested in South Korea, according to Chinese data cited in a 2011 report by Drew Thompson, a Korea specialist who now works at the U.S. Department of Defense.
Jang Song-taek, the uncle of North Korea's new ruler visited Beijing last month to ask for new investment and to try to get China to agree to a state visit for Kim, who has ruled the North since the death of his father.