Despite a recent dispute over "investment traps" with Pyongyang, another Chinese investment group inked an investment deal with the North Korean government Saturday in Beijing to help North Korea boost its economy.

According to the Beijing News Monday, China Overseas Investment and Investment & Development Group of DPRK signed an agreement to launch a fund worth 3 billion yuan ($476 million) for investment in North Korea. With an initial capital injection of 1 billion yuan, the fund will focus on areas such as mining, real estate development and port operation.

North Korean officials expressed their wish to see more Chinese investors investing in DPRK's infrastructure and indicated that investors would enjoy tax and tariff cuts. Projects promoted by the North Korean officials include some 5-star hotels in Pyongyang and Haeju, and a 376-kilometer high-speed railroad.

Despite the enthusiasm from officials of both sides, investing in North Korea may not be as enticing in the eyes of many private investors as North Korean officials would like it be.

"There are great risks in investing in the country," said Wu Xisheng, vice general manager of Xiyang Group, a Liaoning-based Chinese mining company which reportedly lost $55.3 million in a joint venture deal with North Korea.

Xiyang Group revealed early this month on its website that North Korea unilaterally canceled a contract for an iron ore project, confiscated their equipment, and expelled all their employees.

The North Korean government denied the claim and accused the firm for not carrying out all of its obligations.

"The key problem is that foreign investors are not protected," said Wu. "The laws and regulations are there, but they are not necessarily implemented or implemented on time."

Wu's opinion was echoed by another mining investor, who told the Global Times on condition of anonymity that it's crucial that his investment is protected by law if he does sign a contract.

Zhang Liangui, a specialist on Korean issues and professor at the Party School of the CPC, told the Global Times that investors must thoroughly analyze the market as well as the political environment of North Korea before rushing in for the "gold".