China has had astonishing success improving its air quality since declaring a “war on pollution” in 2013. From 2014 to 2022, average levels of fine particulate matter (PM2.5) dropped faster than in any other country, according to the University of Chicago’s Air Quality Life Index. Last year, nearly three-quarters of the country’s cities had average PM2.5 levels below the national standard limit. Taken together, the level of PM2.5 in China’s cities was 36% lower than it had been in 2015. This success followed a range of measures including retrofitting coal power plants. 

China’s efforts at managing air pollution have hitherto focused on the eastern parts of the country. The national air pollution action plan that the State Council issued in 2013 set PM2.5 targets for cities clustered in the Beijing-Tianjin-Hebei area, and in the deltas of the Yangtze and Pearl rivers. In 2018 came another action plan, this time focussed on improving air quality in Beijing-Tianjin-Hebei, the Yangtze Delta and the Fenwei Plain on the middle reaches of the Yellow River. (The Pearl River Delta had been dropped due to its long-term good compliance with the national standard.) These three regions all have an energy mix dominated by coal, and significant air pollution issues connected with heavy industry.

But while in the first quarter of 2025, eastern China’s overall air quality improved, pollution rose in provinces to the south and west of the country. PM2.5 levels in Guangxi, Yunnan and Xinjiang were substantially higher than a year earlier, at 32%, 14%, and 8% respectively.

Apart from time-limited weather factors in several southern regions, this is largely the result of heavy industry, such as steelmaking and coal processing, moving to the south and west of the country where energy is more abundant. What is needed to improve the situation is better integration of renewable power into the grid, the electrification of industrial processes that currently rely on coal, and the continued expansion of clean-energy generation.

The westward shift

In the first quarter of 2025, the average PM2.5 levels of China’s cities was down 5% year on year. Levels of major pollutants such as sulphur dioxide (SO2), nitrogen dioxide (NO2) and PM10 particulates – which correlate closely with industrial activity and fossil fuel use – declined or remained stable. However, in some provinces to the west and south, air pollution went up.

Guangxi, Yunnan and Hainan in particular experienced large increases, with PM2.5 levels growing by 32%, 14% and 11% respectively. Xinjiang, with an 8% rise and a yearly average level of 70 micrograms per cubic metre (µg/m³), took over from Henan as the province with the worst airborne particulates problem. Its PM2.5 measure is now double the national standard of 35 µg/m³ and 14 times the guideline value adopted by World Health Organisation (WHO).

During that quarter, PM2.5 levels rose year-on-year by 22.6% in Kunming, Yunnan and by 10.1% in Urumqi, Xinjiang. These increases were primarily driven by anthropogenic emissions rather than meteorological conditions, according our analysis at the Centre for Research on Energy and Clean Air (CREA). In Kunming, 11.9% of the rise was down to anthropogenic emissions and 10.7% to the weather. In Urumqi, the share was 9.2% versus 0.9%. Anthropogenic emissions were also primarily responsible for the 12.6% and 5% increases seen in the cities of Yinchuan, Ningxia, and Xi’an, Shaanxi, despite overall levels in both those provinces falling. In addition, while levels are down in traditional industrial regions such as Shanxi, north-east China, and the Beijing-Tianjin-Hebei region, anthropogenic emissions continued to exert a positive pressure on pollution levels. This suggests pollution levels may still rise in these regions when weather conditions are slightly adverse.

Where is the pollution coming from?

Across western and southern China, three main factors have driven the recent upturn in air pollution: increased output from energy-intensive industries such as steel, non-ferrous metals, and coal-to-chemical processing in the region; firework displays to celebrate national festivals; and burning of crop stubble in springtime to clear fields ready for new planting.

In the east, meanwhile, there has been a contraction of heavily polluting, energy-intensive industrial production, though this has been partly countered by increased output in the coal-to-chemical sector, which exacerbates the risk of air pollution.

In the first quarter of 2025, western China’s output of crude steel, pig iron and 10 non-ferrous metals increased year-on-year by 6%, 11% and 4% respectively, indicates data from the National Bureau of Statistics. This is compared with a slight decline in eastern China, the only part of the country where all three industries contracted. Output from infrastructure-related industries, such as cement and glass, declined in both the east and the west.

In terms of the share of electricity supplied by coal and other thermal power, western China experienced the biggest drop, with a 5.5% decline, which is more than the national average. However, in some parts of central, southern, south-western and western China, the proportion of clean energy has gone down in the past few years, bucking the national trend. In provinces rich in renewable-energy resources, such as Xinjiang and Inner Mongolia, coal power is expanding at a faster rate than clean energy. So, despite thermal power’s declining share of the energy mix, the overall energy transition is still not enough to offset the additional pollution from expanded production in the steel, non-ferrous metals and related industries.

China’s National Development and Reform Commission has added a cleaner method of steelmaking to its 2025 Catalogue of Encouraged Industries for Western China. This is the electric arc furnace “short-process” method, which uses electricity to produce crude steel from scrap steel. The long-process method, by contrast, produces pig iron from iron ore in blast furnaces fired by large quantities of coal. It emits far more carbon dioxide, sulphur dioxide, nitrogen dioxide and particulate matter pollution.

In central and western China, steel production mostly uses the long-process method, possibly due to the abundance of ores and coal in these regions and relative lack of scrap steel. Notably, in western China the growth of pig iron output in the first quarter of this year is nearly double that of crude steel, as calculated using National Bureau of Statistics data. This growth mainly occurred in Ningxia, Guangxi, and the Fenwei Plain – regions considered part of western China when formulating economic development policies.

In the east, pig iron output dropped further than did crude steel, reflecting an overt shift towards energy efficiency and carbon reduction among steelmakers in the region, including the widespread adoption of the short-process method. However, it remains to be seen how long this trend will last and whether it can be consolidated.

In the west, output from conventional coal-to-chemical processing is likewise on the up. Construction is speeding up for both modern and conventional coal-to-chemical projects, driven by falling coal prices and pressure for energy security.

Growth of the conventional industry, typically in the form of coke production and coal gasification, is mainly concentrated in western and central China, with quarter one growth rates of 2% and 6% respectively.

More modern forms of coal-to-chemical processing, seen for example in the production of ethylene (a gas used especially in the manufacture of polythene) are prevalent in the east and central regions. The chemicals sector, being one of the few energy-intensive industries that is still growing, is itself a significant driver of air pollution.

Guangxi in focus

There have also been tradition-related challenges affecting air quality in the south. Air pollution in Guangxi significantly worsened at the end of January with the start of the Spring Festival period. This was due to intensive firework use coinciding with stagnant weather conditions that trapped the resulting smoke. Guangxi’s PM2.5 level for the first quarter of 2025, at 41 µg/m³, was its highest in at least three years.

Inadequate efforts to mitigate the impacts of these weather conditions, coupled with weak enforcement of regional firework bans and joint control measures, contributed to heavy pollution in the autonomous region. On 29 January, the first day of the Lunar New Year, three cities in Guangxi recorded heavy pollution; in Nanning, the PM2.5 hourly concentration peak reached 1,632 µg/m³ at one point, while in Yulin, the daily average concentration reached 428 µg/m³.

On 11 February, six counties in south-eastern Guangxi were questioned about the severe air pollution. The subsequent report stated that all six are traditional agricultural counties where pollution was caused by straw burning, scattered coal use and fireworks. Beyond these, other sources of widespread and persistent local pollution include the open burning of agricultural residue, excessive emissions from industrial facilities, and delays in ending the use of small coal-fired boilers, the report noted.

Updated policies on crop-stubble burning are also bringing new seasonal challenges. This year, China’s key policy statement for rural development, the No. 1 Central Document, replaced the blanket ban on burn-offs with a more flexible mechanism for “restricted burning”. Several provinces are now piloting “time-limited, zone-specific” conditions for the activity. Stubble burning during spring ploughing has become a major source of particulates, and there is an urgent need for stronger policy oversight.

Industrial relocation and the risk of air pollution

The upsurge in air pollution reflects the migration of China’s coal-to-chemical and steel industries towards energy-rich regions in the south-west.

In 2020, China began ramping up efforts to develop the western regions. Projects geared towards exploiting energy and resources in those regions were encouraged and prioritised for approval. Under the State Council’s employment-first strategy, announced in 2024, proposals were introduced for steadily steering capital-, technology- and labour-intensive industries into the heart of China’s central and western regions. Electricity for large-scale industrial use is cheaper in western China than in the east due to more favourable conditions for generating power from diverse renewable resources, giving the region a competitive advantage, as China Energy News has noted. Given that energy generally accounts for over 10% of costs in conventional energy-intensive industries, there is an obvious incentive to relocate westwards.

In March this year, as part of preparations for China’s 15th five-year plan for economic development (in 2026-2030), the National Energy Administration presented a new formulation: “power from the west of the country, utilised in the west of the country”. This is clearly aimed at nudging energy-intensive industries to cluster where renewable-energy resources are at their most plentiful. Furthermore, carbon and environmental costs are set to rise for the steel, cement and aluminium smelting industries as carbon markets expand, and this too could drive a westward shift in the corresponding sectors.

The outcome of industrial relocation is beginning to take shape. In the first two years of the 14th five-year plan period (for 2021-2025), the average growth rate for industrial added value in western China was 5.2 percentage points above the national average – far higher than in 2016-2020. Yunnan, with its abundant hydropower, has attracted aluminium smelting projects from across China. Meanwhile, Xinjiang leads nationally in terms of the growing capacity of its coal-to-chemical sector, having attracted nearly CNY 500 billion (USD 70 billion) of investment. That figure is expected to surpass CNY 1 trillion during the 15th five-year plan period.

As the wave of industrial relocation to western China gathers momentum, multiple challenges remain in realising the goal of clean power from the west, utilised in the west. Grid planning for western China currently focuses on large-scale outbound transmission, Yue Hao, a senior expert at State Grid Jibei Electric Power Company, told China Power Enterprise Management. As more energy-intensive industries congregate there, the regional power grid becomes increasingly difficult to operate, he added. Electricity demand in western China, rising rapidly and at a higher rate than the national average, is expected to peak later than in eastern China. This places additional stress on the capacity of western regions to absorb and coordinate the supply and demand of their own clean energy, Yue further noted.

The original purposes of moving energy-intensive industries westwards was to coordinate the development of clean energy with industry needs, reduce overall carbon intensity, and meet the policy requirement for synergies in “cutting pollution and reducing carbon”. However, this throws up challenges in terms of managing the environment of areas not designated as critical for pollution prevention.

Green transition as the strategic crux

The central government has shown how determined it is to further improve China’s air quality. It has set a target for lowering the average annual PM2.5 level to less than 25 µg/m³ by 2035, a significant tightening of the current national standard of 35 µg/m³. Achieving it would necessitate a fall of more than 10% against the national levels seen in 2024.

With air pollution trending upwards in areas not designated as crucial for pollution control, national countermeasures during the 2026-2030 period will need to address the spatial distribution of energy-intensive industries and ensure coordinated regional planning for industrial development and air-pollution control.

With particular emphasis on high-emission industries such as steel, coal-to-chemical and non-ferrous metals, this would mean promoting low-carbon technology adoption, advancing industrial electrification and accelerating the clean transition of energy systems. Eastern regions would also be supported to help restructure green-industrial chains in central and western China by exporting capital, technology and governance capability, thereby shaping an architecture of governance based on cross-regional coordination.

Air quality has become a significant indicator of a region’s capacity for high-quality development. It relates directly to industrial transformation, talent gathering and levels of public health, and shows how effectively a region is managing its manufacturing sector’s green transition. Good air quality reflects how well a region adapts to environmental constraints and indicates that the region’s economic development can be resilient and sustainable. Going forward, inter-regional competition for economic success no longer has to mean sacrificing the environment for growth. Green development should be the strategic crux instead, so as to realise the synergies between environmental improvement and economic growth.