The State Council, China's cabinet, on April 13 released new regulations on overseas investment, pledging good business conditions but restricting funds to environmentally unsound projects.

According to the new regulations, China welcomes foreign investment in hi-tech industries, service sectors, energy-saving and environmental protection; but polluting and energy gorging projects or initiatives in industries running at overcapacity are not wanted.

The State Council said qualified foreign-funded companies are allowed to go public, and issue corporate bonds or medium-term bills in China.

Foreign-funded enterprises are also encouraged to increase their investment in China's central and western regions, particularly in environmentally friendly and labor-intensive companies.