Under this proposal, the Sinuiju SAR would have its own "Basic Law" (기본법; Kibonpŏp), passport, flag and seal, and have large autonomy in all areas except foreign policy and defense.

In 2002, the Presidium of the Supreme People's Assembly promulgated the Basic Law of the Sinuiju SAR and appointed Yang Bin as its governor.

In 2001, North Korean leader Kim Jong Il visited Shanghai, where Chinese officials attempted to impress him with China's economic reforms.

[1] Impressed, Kim told Chinese leader Jiang Zemin that "From the time China started to implement the policy of openness and reform, it achieved a tremendous success, especially in Shanghai.

Kim Tong Gyu, a member of the Central Committee of the Workers' Party of Korea and the official in charge of negotiations with Yang, suggested to him on 21 January 2001 about a cooperation on a bigger project.

He explained the difference by saying a SEZ simply has a special economic regime, while a SAR has autonomy in almost every area except defense and foreign policy.

North Korean officials agreed, and Yang also negotiated that the new SAR would have its own Basic Law, published in open sources, its own passport, and its own flag and seal.

[3] In 2002, the Presidium of the Supreme People's Assembly promulgated the Basic Law of the Sinuiju SAR and appointed Yang Bin as its governor.

[1] Yang said that this was because North Korea was displeased with allowing South Koreans into Sinuiju freely, which he said would be rectified by creating a "compatriot document", similar to the Mainland Travel Permit for Taiwan Residents.

[1] Before he formally assumed his post, he was arrested by Chinese authorities on 4 October and sentenced to 18 years in prison for tax evasion and other economic crimes.