North Korean leader Kim Jong Il praised the economic advance of the Chinese provinces bordering his country, which faces tighter U.S. sanctions aimed at choking his regime’s cash line from the arms trade.

“We were deeply impressed and greatly encouraged to see for ourselves the resourceful and hard-working Chinese people in the region,” Kim said in a letter to Chinese President Hu Jintao, who he met during his Aug. 26-30 trip to China, the official Korean Central News Agency reported yesterday. State media confirmed Kim traveled to the northeastern provinces of Jilin and Heilongjiang on his second trip to his closest ally in less than four months.

Kim, 68, returned to North Korea yesterday as the administration of U.S. President Barack Obama announced fresh financial sanctions against government officials and agencies suspected of supporting the country’s weapons industry. In an Aug. 27 meeting with Hu, Kim emphasized the need to carry the two countries’ relationship “forward through generations,” KCNA said.

“Northeastern China holds the key for North Korea to seek joint development of its own region bordering the area,” said Kim Yong Hyun, a professor of North Korean studies at Seoul- based Dongguk University. “Kim’s trip would have been aimed at securing substantial development projects that go beyond simple aid packages.”

The U.S. Treasury Department yesterday blacklisted four North Koreans, three of the country’s companies and five government agencies suspected of “illicit and deceptive activities” that support the Kim regime’s weapons industry. The wider sanctions were in part a response to the sinking of a South Korean warship in March with the deaths of 46 sailors, an act the South and U.S. blamed on a North Korean torpedo.

Companies, School

Kim’s trip included stops at a chemical fiber company, agricultural expo and a food company. On the first leg of his trip to Jilin City he also visited Yuwen Middle School and Beishan Park to commemorate “revolutionary activities” of his father, North Korean founder Kim Il Sung, against Japan’s occupation of the Korean peninsula, KCNA said.

Visiting historical sites linked to his family may have also been aimed at “legitimatizing a hereditary succession to audiences both at home and abroad,” Dongguk’s Kim said.

Reports by KCNA and China’s official Xinhua News Agency on the trip made no mention of Kim’s youngest son, Kim Jong Un, who is believed to be the most likely successor. The ruling Korea Workers Party plans to elect new leaders at party congress early next month, which South Korean officials have said may provide some insight into the succession.

Baton of Friendship

“With the international situation remaining complicated, it is our important historical mission to hand over to the rising generation the baton of the traditional friendship,” Kim said on Aug. 27 at a banquet hosted by Hu, KCNA said.

Hu congratulated North Korea on the party congress and said China seeks to take bilateral friendship and cooperation to a “higher level,” KCNA reported.

Getting China’s endorsement is crucial for Kim Jong Un to fend off any challenge by North Korea’s elite to his leadership, said Yang Moo Jin, a professor at the University of North Korean Studies in Seoul. Little is known about the son, who may be in his late 20s.

“Kim would have reassured China that he is committed to denuclearization in exchange for a clear backing by his ally for his successor,” Yang said. “China wouldn’t want to commit itself to a large aid package, which can be used as leverage in the process of getting North Korea disarmed.”

Six Parties

Kim told Hu he hoped for an early resumption of the six- party talks on his country’s nuclear weapons program, which last convened in December 2008, Xinhua reported. China is host of the talks, which also include Japan, Russia, South Korea and the U.S.

South Korea has said the nuclear talks can only resume after North Korea admits to the attack and apologizes. The North has repeatedly denied its role in the March 26 attack and China has also refrained from naming Kim’s regime as the culprit.

North Korea’s economy shrank 0.9 percent to 24.7 trillion won ($21 billion) in 2009, with trade falling 11 percent, according to the Bank of Korea in Seoul. The country has been put under tougher United Nations Security Council sanctions since its second nuclear test in May 2009.

To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net

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