The central government is getting tougher with sectors where it sees signs of overcapacity, with new curbs on investment in unwanted industries.

The State Council issued a document yesterday detailing measures to promote widespread adjustments to the country's industrial structure.

The National Development and Reform Commission, the top economic planning agency, simultaneously issued industry guidelines listing wasteful businesses that should be discouraged, and promising help to industries welcomed by the government.

The State Council document urges local governments to treat the adjustment of industrial structures as "a major task".

It also urges central agencies and local governments to introduce incentives to encourage and support the development of "advanced productivity" and other measures to limit the growth of out-of-date industries and eventually eliminate them.

"Relevant departments must speed up formulation and amendment of policies on finance, credit, land use, foreign trade and other issues, so as to facilitate and push forward the industrial structure adjustment," it says.

Liu Zhi , who is head of the commission's industry policy department, said in Beijing yesterday that irrational investment since 2003 had resulted in excessive capacity.

Mr Liu said the government would offer tax breaks and loans to industries such as agricultural production, oil and gas exploration and coal mining, particularly focusing on environmentally friendly projects.

"Environmentally friendly projects such as small-emission [car] production will gain government support," he said.

The government is limiting the building of villas, golf courses and other luxury projects in an effort to protect the environment.

However, it has also warned local governments "to properly handle the relationship between government guidance and market regulation, and let the market be the main player in resource allocation".

The commission has classified 1,128 industries that are either to be "encouraged", "restricted" or "eliminated". Of these, 539 are listed as to be "encouraged", 190 "restricted" and 399 "eliminated".

The unwanted industries are all polluting, unsafe and small-scale ones such as small coal mines, chemical plants and electricity generating plants with capacities of less than 50MW.

The industries plagued by overcapacity that need restricting include iron and steel, electrolytic aluminium, ferroalloy, coke, calcium carbide, car-making and copper refining.

The commission said it would begin issuing monthly reports on  11 sectors suffering from overcapacity, including steel and automotive.

Fixed-asset investment has been the driving force behind the mainland's economic boom, accounting for a dizzying 45 per cent of national output, but Beijing is now trying to redirect growth towards private consumption. It also wants to give priority and support to high-efficiency and renewable energies.