Feb. 26 (Bloomberg) -- Suiping Huaqiang Plastic Co. Ltd., China's biggest maker of plastic bags, closed down after new laws banned the use of most of its products, the official Xinhua News Agency reported, citing a local government official.

The company could make 250,000 tons of bags worth 2.2 billion yuan ($307 million) annually, Xinhua said, citing Liu Henglie, director of the commerce bureau in Suiping County in the northern province of Henan. Its parent is Nanqiang Plastic Industrial Co. in Guangzhou in southern China, Xinhua said.

The 20,000-worker company stopped production last month because more than 90 percent of its products are banned under new environmental rules, Xinhua said. The State Council, China's cabinet, on Jan. 9 ordered a stop to the production, sale and use of plastic bags thinner than 0.025 millimeters starting on June 1, Xinhua said.

A woman who answered the phone at Nanqiang today confirmed that the company is closing. She declined to identify herself or provide further details.

To contact the reporter on this story: Lee Spears in Beijing at lspears2@bloomberg.net.

Last Updated: February 26, 2008 03:58 EST