China's planning agency has approved plans for a Disney theme park in Shanghai. The approval by the National Development and Reform Commission will allow Shanghai and Disney to work on final details for the amusement park, to be located in the city's eastern Pudong district.

"China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone for the Walt Disney Company in mainland China," said Robert Iger, president and chief executive of Walt Disney.

Disney has expanded its presence in mainland China after opening a theme park in Hong Kong in 2005 and now has offices in Shanghai, Beijing and Guangzhou.

The breakthrough comes less than two weeks before President Barack Obama's planned visit to Shanghai.

Last year, Shanghai's Mayor Han Zheng said the two sides were getting down to serious negotiations. But he compared Disney and Shanghai to "lovers, still in love but having a hard time deciding when to get married", the Shanghai newspaper Oriental Morning Post quoted him as saying.

Shanghai's leaders are keen to develop this former bastion of industry into a services and financial centre, and building a Disney park would create jobs and boost tourism.

- AP