China has introduced tougher guidelines to restrict investment in the country's milk sector.

New investors must have net assets of at least twice the capital required for a project and total assets must be three times the amount of funding required.

Investors must also have access to a stable milk supply, China's state-planning authority, the National Development and Reform Commission (NDRC), said.

The government agency said that it hopes to control investments in the sector and encourage consolidation.

China, the world's third-largest milk producer, has targeted milk production of 23.5m tonnes by 2010 and 28m tonnes by 2012.