BEIJING, June 14 (Xinhua) -- The State Council, China's cabinet, Wednesday announced its decision to set up pilot zones for green finance to support its industrial upgrading and to further cut red tape.

The pilot zones will be in Guangdong, Guizhou, Jiangxi and Zhejiang provinces and Xinjiang Uygur Autonomous Region.

The zones will explore replicable ways to boost green financing, according to the State Council executive meeting chaired by Premier Li Keqiang.

China will support financial institutions to set up green finance departments and welcome foreign capital to participate in green investments.

The State Council will also encourage the development of "green credit," which takes the environmental credentials of companies into account.

The country will roll out pilot markets for trading water and energy rights.

The central government will provide support on fiscal, tax, and land policies for green industries and projects.

A risk prevention mechanism must also be established for the healthy development of green finance.

It was also decided at the meeting that China must further streamline administrative approval for the production of certain industrial products and delegate power to lower levels to promote innovation and upgrading of manufacturing industry.

The number of categories of products that require official licensing has been reduced from 487 to the current 60 after rounds of reform over the past years.

The General Administration of Quality Supervision, Inspection and Quarantine, China's quality watchdog, will delegate the licensing authority of another eight categories of products, including chemical fertilizer, to provincial-level quality supervision departments, the meeting decided.

The country will also pilot reform to streamline procedures for manufacturing license applications in some designated areas and industries.

Government departments concerned should further step up compliance oversight, Li said.