China has prepared a draft of mandatory environmental measures for companies investing overseas, state media reported Friday.

The new rules, reported by the official China Daily, come as a steep increase in Chinese investments abroad has triggered a heightened focus on the effect these will have on the environment.

The regulations could also rein in a new trend that sees some Chinese companies relocate their polluting operations to countries with more relaxed environmental regimes, the newspaper said.

While big state-owned enterprises generally observe environmental rules, smaller companies are more likely to cut corners, it said.

The paper did not provide details about the rules, prepared by the Ministry of Environmental Protection and the Ministry of Commerce.

China's overseas investments have risen rapidly in recent years, from US$2.5 billion (S$3.6 billion) in 2002 to 40.7 billion dollars in 2008.