China's top economic planning body said Monday it has approved the establishment of a "pilot economic transformation zone" in north China's coal-rich Shanxi Province to diversify the region's resource-based economy.

The goal of the zone was to transform the conventional industries and strike a balance among the agricultural, industrial and tertiary sectors in Shanxi, said Peng Sen, Vice Minister of the National Development and Reform Commission (NDRC) at a press conference.

The zone is also designed to help Shanxi achieve green and sustainable development, bring about equal public services for rural and urban people, and set an example for other central and western regions, he said.

"Shanxi has powered the economic development of other regions, but with heavy economic, social and environmental consequences," said Niu Renliang, Vice Governor of Shanxi.

In the past 60 years, Shanxi had produced 12 billion tonnes of coal, of which 75 percent had been transported to other regions, said Niu.

This had resulted in Shanxi's over-dependence on external demand. "During the Asian financial crisis, Shanxi's economy faced great difficulties. In the international financial crisis in 2009, Shanxi was the slowest growing regional economy in China."

Shanxi also suffered from an unsustainable industrial structure. "The sectors of coal and coke manufacturing, power generation and metallurgy accounted for more than 85 percent of its total economy," said Niu.

Other targets of the zone included eliminating outdated production capacity, repairing environmental damage, and improving work safety, said Niu.

(Xinhua News Agency December 13, 2010)