Downer's two-day visit comes after the reclusive Stalinist country suggested it might not attend a next round of preparatory talks aimed at ending the nuclear standoff.

North Korea's state news agency KCNA reported late Tuesday that Downer had arrived in Pyongyang and had been met by foreign affairs officials.

"If North Korea were to abandon its nuclear program, it would certainly lead to a very substantial increase in Australia's economic engagement with North Korea, not just in terms of aid... but also in terms of broader trade investment activities," Downer told reporters in Beijing earlier in the day.

"It's a point I would make to North Korea (that) there are great opportunities for North Korean people if they abandon their nuclear programs.

"Those opportunities will be borne out of substantial economic engagements with many countries, including a significant Asia-Pacific economy like Australia."

The North said Monday it "had nothing to expect" from a fresh round of six-nation talks because of what it called a hardline US policy.

The working level meeting is scheduled to be held prior to a fourth round of full-blown talks expected before the end of September.

Downer, who met with Chinese leaders Monday, said he did not get the sense the working-group talks were cancelled.

"The message I had from the Chinese was that no scheduled time had been scheduled for that meeting, not that the meeting had been cancelled," Downer told a news briefing.

Chinese and North Korean officials also met in Beijing Monday.

Downer asserted that Australia had an important role to play in resolving the near two-year standoff over the North's nuclear weapons drive.

It is one of the few countries with diplomatic relations with North Korea and has a strong alliance with the United States as well as good ties with Japan, South Korea and China -- all parties in the talks along with Russia.

"I think Australia can bring a unique perspective to the North Koreans about this issue and the way forward," Downer said.

"I hope that our intervention will ensure that the next round of six-party talks in September, October in this period... can be more fruitful than might otherwise be the case."

Prior to his trip, Downer said in Australia that the North Korean nuclear standoff was a "profoundly serious issue" that threatened Australia's security.

He shook diplomatic sensitivities in Australia by warning that North Korea could launch a missile assault on the United States or Australia, which he admitted has no capacity to defend itself against such attack.

WAR.WIRE