KUNMING, July 23 -- The State Council, China's cabinet, has approved the establishment of a cross-border cooperation pilot zone in southwest China's Yunnan Province, local authorities said Thursday.

The pilot zone, based in the Mengla County in the Xishuangbanna Dai Autonomous Prefecture, is of great significance for the cooperation between China and countries in Indo-China Peninsula, according to the publicity office of the prefecture.

The pilot zone, which is expected to cover 4,500 square meters, will involve ten townships in Mengla, the office said.

They will spend ten years constructing a comprehensive transport system linking China's southwest economic circle and the Indo-China Peninsula, and a China-Laos economic cooperation zone, the prefecture's development and reform commission said.

It will also house cross-border trade and tourism, international logistics, processing of imported and exported products in order to promote the development of the areas and countries around the zone, the commission said.