North Korean leader's son unveiled, seen as successor

North Korea's ailing leader Kim Jong-il gave his youngest son his first public title on Tuesday, naming him a general in a move analysts said marked the first stage of dynastic succession in the secretive state.

State media mentioned Kim Jong-un for the first time by name, but without identifying him as the son of the iron ruler, hours before the start of a rare ruling party meeting to elect its supreme leadership.

Kim Jong-il, 68, is believed to have suffered a stroke in 2008, but despite declining health shows no sign of relaxing his grip on power, underlined by his reappointment on Tuesday as secretary-general of the Workers' Party.

Experts say his son is too young and inexperienced to fully take the reins.

"As expected, the dynastic transition is becoming public. So far, they are following the pattern we saw in the 1970s when Kim Jong-il himself was moving to become the new Dear Leader," said Andrei Lankov of Kookmin University.

"The difference is that this time they seem to be in a great hurry."

Regional powers are watching the party conference, the biggest meeting of its kind for 30 years, for any sign of change in the destitute state's policies.

"I would like to carefully watch North Korea's internal situation," Japanese prime minister Naoto Kan said.

Financial markets see the preferred outcome of the meeting as a continuation of the current system and relative stability, even though the economy is in near ruin and the internationally ostracised government is trying to build a nuclear arsenal.

The biggest fear is that the country could collapse, triggering a flood of refugees or even fighting on the divided peninsula. That could hit hard the economies of neighbouring South Korea, China and Japan which together account for about 20% of global economic output.

Experts warn of potential infighting over the rise of the unproven young Kim.

"Succession of power may lead to factional fighting and incur tremendous economic cost that will make the Korean peninsula a powder keg," said Shotaro Yachi, a special envoy for the Japanese government and former vice minister for foreign affairs.

State news agency KCNA said Kim had issued a directive bestowing military rank on six people, including promoting Jong-un and the leader's sister Kyong-hui to general in one of the world's largest armies.

The son is believed to have been born in 1983 or 1984 but little is known about him, even by intensely secretive North Korean standards, beyond the sketchy information that he went to school in Switzerland and is his father's favourite. This was the first time has been named in state media.

The last such meeting 30 years ago put Kim, then aged 38, on the path to succeed his father Kim Il-sung, the state founder and now its eternal president, by taking on a Workers' Party title.

"It's striking that the big announcement coming out of a party conference is not a party position but a military position," said Marcus Noland, a North Korea expert at the Peterson Institute for International Economics in Washington.

"This attests to the centrality of the military in governing North Korea today," he said.

By signalling the young Kim''s rise, experts say North Korea is readying for a collective father-and-son leadership.

If Kim Jong-il died suddenly, his son, by then identified as figurehead leader, would be surrounded by close family confidants who have been appointed to senior positions in the Workers' Party and military in recent months.

Kim's appointment of his sister to a military role underlined his resolve to ensure a smooth transition, Noland said. "This is belt and suspenders, keeping it in the family to create another general in the family at the older generation to play some kind of regent role," he said.

His uncle, Jang Song-Thaek, was named to a powerful military post earlier this year, and analysts say he is most likely to act as principal regent until his charge has his own power base.

The party meeting takes place as the North tries to work around UN sanctions -- adopted in 2006 and 2009 in response to Pyongyang's two nuclear tests -- and justify its pledge to become a "powerful and prosperous" nation by 2012.

Two visits to ally China by Kim Jong-il -- who rarely travels abroad -- were in part seen as bids for economic support.

The meeting at a secret location in the capital comes amid a flurry of diplomatic activity in the region after Pyongyang expressed readiness to return to nuclear disarmament talks, which have been in limbo since 2008 when the mercurial North walked out and said they were finished. China has hosted the on-again-off-again talks since they began in 2003.