Beijing Choking on Air Pollution

Feb 24, 2014

Beijing Choking on Air Pollution

Despite closing dozens of factories, halting outdoor construction and sending teams to inspect factories, Beijing on Monday entered its fifth day of intense air pollution, with city officials forecasting the smog to last for at least another three days.

Since Friday, 36 companies in Beijing have suspended production, while another 75 have cut output in a bid to curb emissions and make the air more breathable, the official Xinhua news agency reported, citing the Beijing Municipal Commission of Economy and Information Technology.

Nearby, the city of Tianjin and Hebei province have taken more drastic measures that have included reducing the number of cars on the road and suspending some production in industries such as steel, Xinhua said.

China’s Ministry of Environmental Protection said Sunday it sent inspection teams to Beijing, Tianjin and Hebei to check their responses to the pollution. Xinhua said the teams would inspect the factories of major polluting industries and construction sites, adding that any legal violations would be publicized.

However, the emergency measures appeared to have little effect. Beijing remained shrouded in a thick haze Monday, with an air-monitoring station at the U.S. Embassyrecording an air-quality index of as high as 450 in the early evening. The U.S. Environmental Protection Agency says an index of above 300 is “extremely rare” in the U.S. and typically occurs during events such as forest fires.

“In the short term, more aggressive actions during the (air-pollution) alerts will not only provide some relief to Beijing’s weary residents but also put more pressure on the State Council [China’s cabinet] and other provinces to act,” said Alex Wang, an expert in Chinese environmental law at the University of California, Los Angeles, School of Law.

Beijing’s Ministry of Environmental Protection didn’t immediately respond to a request for comment.

Tian Miao, a senior energy analyst at research firm NSBO, said that while Beijing’s city government has shuttered much of its outdated industrial capacity, most of its air pollution comes from nearby regions such as Hebei, an industrial hub for steel, cement and glass production. Coal-fired power plants are the largest source of air pollutants, and those facilities aren’t easily suspended, she said.

“You can’t stop the heat supply, and you also can’t halt electricity production,” Ms. Tian said.

Beijing authorities reissued an orange alert for air pollution Monday. The color-coded alert system — in order of increasing severity — includes blue, yellow, orange and red. An orange alert is used when authorities forecast an air-quality index of above 200 for at least three consecutive days, with at least one day above 300.

When an orange alert is issued, workers are ordered to stop construction, while factories must reduce emissions by at least 30%. Fireworks and outdoor barbecuing are also banned. Children and the elderly are advised to stay indoors, and residents are encouraged to use public transportation instead of cars. Schools are urged to reduce outdoor activities.

A red alert is issued only when authorities forecast an air-quality index of above 300 for at least three consecutive days, and includes extreme measures such as implementing alternate driving days for cars with even- and odd-numbered license plates. Beijing has yet to issue a red alert since establishing the warning system in October. It issued its first-ever orange alert on Friday.

Beijing’s city government has been ramping up its fight against air pollution amid growing public pressure. It ratified a long-term plan in January that for the first time sets limits on air pollutants and imposes higher fines on polluters, although it scrapped some of the plan’s harsher penalties at the last minute.

“The new announcements are all heading in the right direction,” UCLA’s Mr. Wang said. “But to make it all work, there will paradoxically need to be both tougher top-down enforcement and the willingness of the state to step back and let society innovate toward pollution reduction.”


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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