China's tobacco regulator issued draft rules on Monday to strictly control e-cigarette production in the country, as it tightens oversight over the industry.

The State Tobacco Monopoly Administration said it would "reasonably" control the scale of production capacity to prevent overcapacity.

It also said it would ban any foreign investment in retail of e-cigarette products and would review foreign investment in production, adding that any e-cigarette firms that wanted to list in China or abroad would need to obtain pre-approval.

(Reporting by Brenda Goh; Editing by Edmund Blair)