The State Council of China, the nation's cabinet, said on April 13 that it aimed to "seriously restrict (foreign investment) in high energy, highly polluting... projects."
It added that foreign investment in "high-end manufacturing, high-technology and service industries, and new energy and energy-saving environmental sectors" should be encouraged.
The guidelines, which also encourage foreign businesses to develop labor-intensive industries in the poorer western and central regions of China, were sent to all provincial, regional and municipality governments.
They come after China published a draft of new rules at the weekend that could ease restrictions in the area of government procurement, a move welcomed by foreign firms concerned they might be squeezed out of the market.
A survey released last month showed a growing number of American businesses felt unwelcome in China because of what they saw as discriminatory government policies.
The State Council said China had attracted foreign investment for over 30 years to upgrade its industry and improve its technology, adding that foreign-invested firms had become an important part of the economy.
"At present, the advantages of attracting foreign investment are still obvious," the statement said.
Copyright Agence France-Presse, 2010