China's Premier Wen Jiabao attends a meeting with Uruguayan Vice-President and President of the Congress Danilo Astori, during a visit to the Congress building in Montevideo, June 23, 2012. Wen is in Uruguay for an official visit. 
 
 SHANGHAI (Reuters) - Premier Wen Jiabao encouraged North Korea to allow "market mechanisms" help revamp its economy, state media said on Saturday, and laid down other pre-conditions as China tries to wean its impoverished ally off its dependence on Chinese aid. 
 
 Wen's comments followed his meeting with Jang Song-thaek, the powerful uncle of North Korean leader Kim Jong-un, in Beijing on Friday. Jang is the highest-profile North Korean official to visit China since Kim power in December 2011. 
 
 As well as allowing freer rein to market forces, the Chinese premier also recommended Pyongyang encourage economic growth by improving laws and regulations, encouraging business investment and reforming its customs services. 
 
 China's President Hu Jintao also met Jang in a clear show of support for the North and its new leadership. Jang is seen as the driving force behind reforms that the isolated and destitute North is believed to be trying and for which it desperately needs Chinese backing. 
 
 Beijing has had difficulty managing the relationship with North Korea, which it views as a strategically critical buffer between itself and U.S. military forces in South Korea. 
 
 But North Korea is often more cantankerous than China would like, in particular towards South Korea, even though the economic relationship between China and South Korea is far more important. Bilateral ties are also not always smooth. 
 
 In May, North Korea seized a number of Chinese fishermen and boats in the Yellow Sea and demanded 1.2 million yuan for their release. 
 
 China has expressed unhappiness with North Korea's nuclear weapons program, particularly with nuclear tests that have been conducted near the Chinese border, and is quietly lobbying against future tests. 
 
 Beijing has supported international sanctions against the North in the past, and has also occasionally cut off economic aid, including critical oil shipments, but the desperate state of the North's economy has limited its leverage in Pyongyang. 
 
 Experts and government sources who spoke to Reuters say China cannot go too far with such sanctions for fear of destabilizing the regime entirely, prompting a flow of refugees across the border into China. 
 
 China and North Korea have moved to intensify economic cooperation through development zones in Rason on the North's east coast, and in the border area of Hwanggumphyong. 
 
 So far North Korea has received around $300 million in non-financial direct investment from about 100 Chinese companies, mainly in the food, medicine, electronics, mining, light industry, chemicals and textile sectors. 
 
 China's exports to North Korea rose 20.6 percent last year to $2.28 billion from 2010, while imports plunged 81.4 percent to $147.4 million, according to Chinese customs figures. 
 
 Those numbers are dwarfed by trade with South Korea, China's third-largest trading partner. 
 
 (Reporting by Pete Sweeney; Editing by Paul Tait) ||||| The powerful uncle of North Korean leader Kim Jong Un met both China's president and premier on Friday in a sign that relations between the two countries are back on track after Kim irked Beijing with a rocket launch soon after taking power. 
 
 State media have said the six-day visit to China by Jang Song Thaek, the chief of the central administrative department of the Workers' Party of Korea, is a possible prelude to a visit by Kim himself. China remains North Korea's most important ally. 
 
 The top-level meetings came after Beijing earlier this week agreed to help Pyongyang revamp two trade zones near the Chinese border. 
 
 Since he became North Korea's top leader following his father's death in December, Kim has promoted younger economists to key party positions to help revive his country's economy. North Korea has lagged economically far behind the rest of Northeast Asia, and much of the nation is impoverished outside the capital, Pyongyang. 
 
 Beijing also wants to see bolder economic reforms under the young Kim to lessen North Korea's reliance on hand-outs. 
 
 A few months ago, relations between the two allies were strained. North Korea drew strenuous objections from China, the United States, Japan and others by testing a rocket in April because they feared it would add to tensions on the Korean Peninsula between the North and the South. Analysts said North Korea did not give Beijing advance notice of the launch, which particularly irked them. 
 
 Jang is a vice chairman of the powerful National Defense Commission. He also is seen as a leading economic policy official. 
 
 His meetings with President Hu Jintao and Premier Wen Jiabao in Beijing came toward the end of his visit. Hu praised Jang for his "huge amount of work for the friendly relations between China and North Korea as two neighboring countries," the official China News Service reported. 
 
 Wen told Jang that the China-North Korea friendship has endured historical tests and is a shared treasure to be "doubly cherished." He said Jang's visit will deepen the relations between the two ruling parties and the two nations, according to CNS. 
 
 Jang met Chinese commerce ministry officials earlier this week to discuss the development of two special economic zones in North Korea. 
 
 The ministry said the two sides signed a number of cooperation agreements to further develop the zones _ Rason on the Korean Peninsula's northern tip, and Hwanggumphyong, an island in the Yalu River that marks their border to the southwest. 
 
 Rason would be developed into a manufacturing base, logistics center and tourism hub, and the Hwanggumphyong zone would focus on information technology, tourism, agriculture and garment manufacturing, it said. 
 
 Rason has recently begun to develop thanks to Chinese infrastructure projects, but Hwanggumphyong has languished since ground was broken last year. 
 
 On Thursday, Jang met with Wang Jiarui, the head of the international department of the Communist Party of China Central Committee. Wang said China is committed to strengthening and developing the friendly and cooperative relations between the countries, and Jang said Pyongyang wants to see the friendship strengthen, the official Xinhua News Agency said.
– It's time for authoritarian North Korea to let in some free markets, urged Chinese Premier Wen Jiabao today, following a rare meeting with a high-ranking North Korean official, reports Reuters. Wen and President Hu Jintao met yesterday with Jang Song Thaek, the powerful uncle of North Korea's young leader Kim Jong Un, encouraging North Korea to improve its laws, reform customs services, and encourage business investment. The two countries announced the creation of two special economic zones near the China-North Korea border earlier in the week. Jang is widely considered one of the top forces for reform in the North, so getting strong support from China is vital for the new regime, notes the AP. China may consider North Korea a vital buffer between it and South Korea, Japan, and the United States, but Pyongyang has often been a difficult ally, with its bellicose rhetoric, missile and nuclear weapons programs, and ravaged economy. China's exports to North Korea totalled just $2.28 billion in 2010, while South Korea is China's third-largest trading partner. China's GDP reached $7.3 trillion in 2011, South Korea's $1.1 trillion, and North Korea's an estimated $40 billion.