"In some places, environmental problems have affected people's health and social stability, and damaged our international image," Zhou Shengxian was quoted as saying in yesterday's China Daily.

Rapid industrialization over the past two decades had transformed China into one of the world's most polluted countries, with local governments and industries shunning ecological protection in the pursuit of short-term gains.

Zhou, the head of the State Environmental Protection Administration, noted half the country's rivers were severely polluted and a third of its territory was damaged by acid rain in an address to the annual meeting of China's top environmental thinktank.

Last week, the Organization for Economic Cooperation and Development said China was not doing enough to combat the problem.

It recommended the government spend more on environmental solutions, that local officials be made more accountable, and that SEPA be upgraded from an agency to a full government ministry.

The thinktank, the China Council for International Cooperation of Environment and Development, said China lagged behind developed countries in spending to protect the environment.

In 2005, China spent 838.8 billion yuan (US$104.85 billion), equivalent to 1.3 percent of Gross Domestic Product. By comparison, developed countries invested more than two percent of GDP, the council said.

However, Thinktank experts also said the positive role China was playing for the outside world had been neglected.

China has been the workshop of the world for the past two decades, importing raw materials and exporting finished goods, while the pollution generated by production remained in China.

The problems for China were worsening as heavy industry factories moved from Europe, the United States and Japan to China, the report said.

"We import the raw materials, send the products abroad and keep the waste and pollution ourselves," said Shen guofang, a thinktank expert and a vice president of the Chinese Academy of Engineering, according to the report.