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Wang Qinhua, an MOC official in charge of the mechanical and electrical industry and the scientific and technological sectors, said the government would probably limit or ban the processing trade of high-polluting and high-energy-consuming industries within the year based on studies of the domestic and international markets.

The products covered would come from the list of commodities that have been cut or had their export tax rebates removed in June, said Wang, adding that the ministry was consulting relevant departments and local governments on the issue.

Wang said the customs authorities would take environmental protection and social security into consideration to set stricter entry standards for enterprises engaged in the processing trade.

Meanwhile, the government would continue to encourage labor-intensive industries to shift from the eastern regions to the central and western areas, the official said.

The Chinese government on Monday announced a new policy that seeks to curb the development of the processing trade in labor-intensive industries covering 1,853 products in plastics, furniture and textiles and other industries. The policy will take effect on August 23.

On June 19, the ministry announced that, starting July 1, the country would cut or eliminate export tax rebates for 2,831 commodities representing 37 percent of the total number of items listed on customs tax regulations to suppress overheated export growth and ease frictions between China and its trade partners.

Customs data show the nation's processing trade volume in the first six months rose 17.6 percent to 440.9 billion U.S. dollars, accounting for nearly half of the China's imports and exports.

China has seen its processing trade volume jumping from 2.5 billion U.S. dollars in 1981 to 831.9 billion U.S. dollar in 2006.