A newly erected border fence dividing North Korea from the Chinese city of Dandong, northeastern China, Oct. 15, 2006

China is increasingly distancing itself from its long-time ally North Korea. Beijing officials confirm they are continuing construction of a concrete and barbed-wire fence along their border with the North. Confirmation of the construction project came as Chinese banks began to exert tighter controls on money transfers and other financial transactions with North Korea.

Analysts see intensified work on the border fence as a sign of a growing rift between the two communist neighbors, after Pyongyang defied warnings from Beijing - among many other nations - and carried out its first nuclear test last week.

At a regular briefing, Chinese Foreign Ministry spokesman Liu Jianchao confirmed that work on the fence is moving ahead.

Photographs of the fence also appeared in international newspapers on Tuesday.

But Liu sought to downplay any connection to the nuclear crisis, saying the fence is part of a decade-old project to reinforce the border.

"China has, according to plan, spread some wire netting and set up patrolling roads as well as other facilities on the boundary areas, including the China-North Korea border," he said. "The purpose of constructing these facilities is to improve the situation and conditions for border control and maintain order in border areas."

The border is a major crossing point for two-way trade that is said to be worth several billion dollars a year. Tens of thousands of North Koreans have snuck across the border into China, fleeing oppression and widespread hunger at home.

China supported a U.N. Security Council resolution Saturday that imposes sanctions on North Korea, but Beijing has expressed reservations about enforcing all the sanctions. Analysts say the Chinese fear the measures could cause the North Korean regime to collapse, sending a massive wave of refugees into Chinese territory. The new fence could help keep refugees out.

International media reports in recent days have quoted residents along the Chinese-North Korean border as saying Chinese soldiers have stepped up work on the fence.

Spokesman Liu also warned North Korea not to increase tensions in the region, after Pyongyang issued a statement calling the U.N. sanctions tantamount to a declaration of war. The Chinese official said he hopes North Korea will help resolve the issue through dialogue and consultation, rather than taking actions that may exacerbate the situation.

On Tuesday, banks in the Chinese capital were refusing to accept money transfers to North Korea.

Asked to wire money to Pyongyang, a teller at a Bank of China branch in Beijing says "definitely not." The teller says any money presented for transfer to the North would be frozen and not returned to the sender.

The teller says restrictions on money transfers, usually done in U.S. dollars, have been in place in China for months. But bank employees say restrictions have been tightened in recent days.