The central government has approved plans for an energy industry "golden zone" linking Shaanxi province and the autonomous regions of Ningxia Hui and Inner Mongolia in northwestern China, said an autonomous region official on Wednesday.

"After thorough research and investigation, we applied to the National Development and Reform Commission and the National Energy Administration to establish the 'golden zone' and have received approval and support," said Wang Zhengwei, chairman of the Ningxia Hui autonomous region.

The blueprint for the zone, connecting the energy-rich regions of Yulin city in north Shaanxi province, Ordos in southwestern Inner Mongolia and the Ningdong energy and chemical base in Ningxia Hui autonomous region, was first proposed by Vice-Premier Li Keqiang during an inspection of Ningxia in February 2010.

The zone covers nine cities and areas in Shaanxi and Gansu provinces and the Ningxia Hui and Inner Mongolia autonomous regions and spreads over 240,000 square kilometers.Energy production in this area accounted for 21 percent of China's primary energy output in 2010.

The Securities Times cited the development guidelines for the zone as saying that by 2020, coal production in the zone will total 1.45 billion tons, while oil output will reach 54 million tons and that of natural gas will stand at 55 billion cubic meters.

Wang said that 20 State-owned enterprises have invested more than 120 billion yuan ($18.56 billion) in the Ningdong energy and chemical base and have developed the base into an advanced production facility for chemicals including carbinol, dimethyl ether and coal-based alkene.

Sun Hongbo, a senior researcher at the Chinese Academy of Social Sciences, said the development of a "golden zone" of energy in western China is significant for the region and the country.

"Many parts of China are facing energy shortages, and the abundant energy resources including coal and natural gas in the zone can meet that demand," said Sun. "The development of the 'golden zone' will promote local economic growth and create jobs."

However, he said the government should avoid over-dependence on energy production when developing policies for the region.

"The project will bring big profits in the short term, but in the long run, sustainable and balanced development is needed," he said.

The development of the energy "golden zone" is part of the autonomous region's plan for a new Ningxia.

"Ningxia experienced the fastest economic and social development during the 11th Five-Year Plan (2006-2010).

"In the next five years, we will double the gross domestic product, fixed-asset investment and the incomes of urban and rural residents," Wang told the news conference.

Ningxia recorded gross domestic product of 164.3 billion yuan in 2010, 2.7 times that of 2005. Local fiscal revenue reached 15.4 billion yuan, an average annual increase of 26.4 percent.

The autonomous region's government is determined to develop an economic zone along the Yellow River, which is an important component of the "golden zone" of energy.

The economic zone along the Yellow River will help transport the coal of the Xinjiang to Ningxia and lay the groundwork for importing oil and natural gas from the Middle East and Central Asia.