In its latest attempt to cool the economy, the State Council issued a circular that also called for a nationwide examination of nearly all ongoing investment projects including commercial offices, golf courses and shopping malls.

Xinhua news agency said the council, China's cabinet, in addition wants the process of converting farmland for use in infrastructure projects to end so as "to curb the investment craze in some industries and to ensure the smooth operation of the national economy".

The orders are the latest in a string of administrative measures by the central authorities to try to calm soaring investment by local governments which is contributing to over-heating and over-investment in some sectors.

The efforts to curb economic growth, which Premier Wen Jiabao said this week would be "forceful", have rattled neighboring countries that depend on China's booming economy, which grew 9.7 percent in the first quarter.

Financial markets across Asia have slumped, while sentiment has been dampened globally.

Xinhua reported in February that the State Council had dispatched working groups to various parts of the country to investigate the "investment landscape".

In its report Friday, the state-run news agency said the top decision making body had recently issued a circular requiring all localities and departments to kick off examinations of most investment projects in fixed assets under construction or to be built.

Projects banned by national policies or conflicting with laws and regulations on land management should be halted, it said.

Those which did not comply with environmental protection regulations, urban construction blueprints, approval procedures or loan policies should be suspended.

The government has been trying to cool investment for the past eight months through a variety of measures, including curbing bank lending and issuing administrative orders for clampdowns on inefficient and duplicated projects.

On Friday, the banking regulator called on the nation's banks to reduce lending to the auto, steel, property, cement and aluminum industries.

The China Banking Regulatory Commission (CBRC) also said in a statement on its website that banks should step up financing of projects in coal, power, oil, water supply, transport and other areas related to basic infrastructure so as to ease bottlenecks.

The moves have been interpreted by the markets as preparation for an interest rate hike, although the CBRC made no mention of this.