A McDonald's joint venture in China supplying its outlets with French fries has been slapped with a record 3.9 million yuan ($630,000) fine for water pollution, state media reported.

The fine levied against Beijing Simplot Food Processing is the largest ever meted out by the city of Beijing for pollution, the official Xinhua news agency said, citing the municipal environmental watchdog.

Beijing Simplot Food Processing is a joint venture between US agribusiness concern J.R. Simplot Company, McDonald's and the Beijing Agricultural, Industrial and Commerce General Company, Xinhua said.

Established in 1992, Beijing Simplot makes French fries and hash browns for McDonald's, Xinhua said, adding that it also produces them for "other East Asian customers", without elaborating.

The fine comes as China cracks down nationwide on air, water and soil pollution amid rising public discontent over health concerns, and national embarrassment of the blight on the image of the world's second-largest economy.

A new environmental law -- the first in 25 years -- went into force this year, imposing tougher penalties and pledging that violators will be "named and shamed".

Recent studies have shown that roughly two-thirds of China's soil is estimated to be polluted, and that 60 percent of underground water is too contaminated to drink.

According to Xinhua, inspectors in November discovered that a water quality indicator in Beijing Simplot Food Processing's waste water exceeded limits and immediately blocked its pipes, ordering it to treat the water at a processing plant.

The polluted water flowed into city pipes, the report said, citing a local environmental protection office.

In a statement posted on its website on Wednesday, Beijing Simplot Food Processing said it accepted the decision and paid the fine on schedule after having "immediately cooperated" with authorities after the problem was discovered.

McDonald's said in a statement e-mailed to AFP that it took the violation "very seriously" and would be monitoring Beijing Simplot's compliance in the future.

"All McDonald's suppliers must comply with all relevant local laws and regulations," it said.