The Urethane Blog

China Smog Red Alert

China Orders Shut Down Of 1,200 Factories After Smog “Red Alert” Declared In Beijing


In addition to its now traditional credit-funded boom-bubble-bust cycle which rotates from asset to asset, and is then promptly recycled courtesy of the nearly $35 trillion in various financial system “assets”, another staple of the “new” Chinese economy are smog alerts following every burst in economic strength driven by “old economy” manufacturing.

That’s what happened overnight, when following months of manufacturing expansion, China’s pollution problem has again caught up, and as a result Beijing’s city government ordered 1,200 factories near the Chinese capital, including a major oil refinery run by state oil giant Sinopec, to shut or cut output on Saturday after authorities issued the highest possible air pollution alert.

At 4:20pm on Friday afternoon, China’s environmental watchdog issued a five-day warning about choking smog spreading across the north and ordered factories to shut, recommended residents stay indoors and curbed traffic and construction work, as the main Chinese news agency tweeted “Smog invades Beijing,” while posting a timelapse as well. Another tweet from Xinhua showed the skies blackening on Friday.

Such “red alerts” are issued when the air quality index (AQI), a measure of pollutants in the air, is forecast to break 200 for more than four days in succession, surpass 300 for more than two days or overshoot 500 for at least 24 hours.  The Beijing Municipal Environmental Monitoring Centre showed an air quality reading of 297 by Saturday afternoon as haze started to envelop the capital, after an earlier reading of around 120. Levels in the 301-500 band are considered hazardous to health.

Primary schools and nurseries will remain shut down until Wednesday, when the smog situation is supposed to end, according to Xinhua. Old and ‘dirty’ vehicles have been banned from the roads, while polluting industries were told to halt or minimize their work.

Traffic on the city’s roads was lower than usual as residents complied with limits on car use and many of the city’s 22 million residents sat out the haze at home. “I’ll just take a rest and not go outside,” said Wang Jianan, a 23-year-old Beijing resident and teaching assistant. With Christmas just a week away, others resorted to dark humour to help cope with the latest episode of toxic air.

Chinese media reported that at least 388 people have been fined for lighting outdoor barbecues and fires.

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Beijing, with its population of 21 million, wasn’t the only city to declare a red alert, the Chinese ministry of environmental protection said, listing 21 other cities hit by pollution, including Tianjin, Shijiazhuang, Taiyuan, and Zhengzhou.

The red alert was one year ago as part of a four-tier warning system inaugurated in 2015 in the framework of the country’s war on pollution. Nevertheless, in February, Beijing had to raise the red alert threshold.

A red alert is currently declared if the average air quality is at 200 AQI (air quality index) for four days in a row, 300 for at least two days, or 500 for a single day. An initiative to build wind corridors through the capital to help alleviate the smog was announced in February. The ventilation corridors are to measure 80 to 500 meters and connect parks and rivers, highways, and tall buildings.

As RT adds, in January China closed down some 2,500 polluting companies to lessen the smog, while admitting that the country is unlikely to meet its anti-pollution goals by 2030. The hazardous air underscores the challenge facing the world’s second-largest economy as the government battles pollution caused by the coal-burning power industry and other heavy industry after decades of breakneck economic growth.

The good news is that for China smog has become a natural peak “output absorber”, as any time the “old economy” overheats to boost goalseeked GDP, usually after a few months of record credit expansion like now, the air becomes unbreathable, and Beijing is forced to enforce an economic slowdown to dissipate the pollution, which in turn leads to an economic slowdown, and a break in the credit impulse, forcing even more credit creation to restart the cycle the next time.

The bad news is that China’s smog is wreaking havoc on the health of the domestic population, and although the country has made “huge progress” in tracking the sources of pollution, the risks to its citizens’ health remain. “There isn’t much research on the relation between air pollution and lung cancer in China, and even less with accessible research results. It’s sensitive. The government does not want to cause panic among the public,” Beijing-based environmentalist Ma Jun told the New York Times earlier this week.