The inspection found earlier this year that Unilever China and the China branch of Hitachi Construction Machinery Co. were discharging wastewater with higher chemical content than permitted, the China Daily reported.

"We were surprised to find both companies had environmental pollution problems since they were the only two foreign companies selected at random for the inspection," said Ren Longjiang, an official with the State Environmental Protection Administration.

"Environmental pollution caused by some foreign-funded companies has come to (our) attention and we will strengthen our supervision," Ren said.

Unilever's plant in Hefei in the eastern province of Anhui was fined 100,000 yuan (13,300 dollars) and ordered to cut production to reduce discharge. It has also paid nearly 50,000 yuan for excessive discharge, the report said.

Unilever could not be reached for comment on Tuesday, while Hitachi declined comment.

Analysts said that such a warning was likely to be driven by rising domestic concerns that foreign polluting industries were finding their way to China, thanks to lower costs and the country's pressing need to create jobs.

"There is a widespread concern that international polluting industries are moving to China," Andy Xie, an independent economist in Shanghai, told AFP.

"It's a big problem in China that (the government) chooses to create jobs at the cost of the environment because of excess labour in the countryside."

For example, the production of coke was flourishing in north China's Shanxi and Shaanxi provinces and has become a major source of pollution there, he said.

But it is no longer an urgent priority to attract foreign funds, just as the need to create jobs is felt less keenly, and therefore China now is able to say no to this type of industry if the cost is deemed too high, Xie said.

"It's a signal that China no longer welcomes foreign industries which provide only limited job opportunity or low technology."

The country's fast industrialisation has meant major environmental costs, with up to 70 percent of its waterways polluted and air quality in its biggest cities among the world's worst.

The government has set a goal of reducing two major pollutant indicators -- sulphur dioxide for air and chemical oxygen demand for water -- each by 10 percent from 2006 to 2010, an average decline of two percent a year.

However sulphur dioxide emissions fell by just 0.88 percent in the first six months of this year, while chemical oxygen demand increased by 0.24 percent, after both indicators rose last year.

As part of its efforts to curb the discharge of pollutants, China said last month that it would earmark more than 1.33 billion yuan for monitoring and reducing pollutant emissions, and for a new system of emission trading.

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