BEIJING - China's biggest bank yesterday said it would curb lending for real estate and industrial projects, in line with the government's efforts to limit excess investment and cool a dangerous bubble in asset prices.

The announcement by Industrial & Commercial Bank of China (ICBC) - also the world's largest by market value - was the clearest sign yet of how borrowers will be affected by Beijing's effort to control credit after a flood of lending last year to support stimulus projects.

The bank said it would reject developers that hoard vacant land or housing. The government is trying to increase the supply of affordable housing and has said that some developers are keeping properties off the market to help push up prices.

Echoing government plans, ICBC added it would "strictly control" lending to real estate and industrial projects deemed too dirty or energy-intensive and those outside government development plans.

China's banks are regarded as the healthiest of any major economy.

They avoided the mortgage turmoil that battered Western institutions and are flush with cash from the country's economic boom.

Economic growth accelerated to a 10.7 per cent year-on-year pace last quarter, the fastest since 2007, responding to an unprecedented 9.6 trillion yuan ($2 trillion) of credit extended by banks in 2009 and a 4 trillion yuan fiscal stimulus plan.

But Chinese leaders have warned that reckless lending has contributed to excessive investment in some industries such as steel and cement and contributed to a possible bubble in stock and real estate prices.

Chief banking regulator Liu Mingkang said last month that Chinese banks were expected to scale back lending to about 7.5 trillion yuan this year after handing out 9.5 trillion yuan in 2009. AGENCIES