24/7 Wall St.

The level of air pollution is so high on certain days that the Beijing’s government has to shutter factories and restrict the number of cars which enter the city. China is taking more extraordinary measures in 2017. According to the People’s Daily, it will spend $2.6 billion to combat air pollution in the nation’s capital.

The editors of the official Chinese paper report:

Beijing aims to control the annual average density of PM 2.5 to around 60 micrograms this year, said Lu Yan, head of the Beijing Municipal Reform and Development Commission.

PM 2.5 are fine particles measuring no more than 2.5 micrometers in diameter.

Average density of PM 2.5 in the Chinese capital was 73 micrograms per cubic meter in 2016, down 9.9 percent from the previous year, Lu said.

Fulfilling the task will not be easy, and could affect the economy of the huge Beijing metro area. Coal is traditionally used to heat homes, of which there are hundreds of thousands. Curtailing factory production to fight air pollution almost certainly has a cost of reduced output. The health of China’s car industry has its foundation on the sale of 24 million cars and light vehicles a year nationwide. Measures to keep cars out of large cities as a means to control air quality would mean a drop in demand among consumers who might buy a car soon

China continues to be vexed by air pollution which can close everything from schools to businesses. These have a productivity effect of their own

The $2.6 billion is only the tip of the iceberg in terms of costs. Manufacturing and the auto industry could take big hits of the government to reach its goals.