The Ministry of Environmental Protection has officially released its remediation plan: the “work‑stop order” will not be mandatory, and environmental protection will yield to “ensuring people’s livelihoods.”

Release Date:

2018-10-12

In accordance with the guiding principles of the CPC Central Committee and the State Council’s “Three-Year Action Plan for Winning the Battle to Protect Blue Skies,” the “Comprehensive Action Plan for Tackling Air Pollution during the 2018–2019 Autumn and Winter Season in the Beijing–Tianjin–Hebei Region and Surrounding Areas,” after soliciting public input, has recently been officially released. Addressing the issue of production shutdowns and output restrictions—commonly referred to as “shutdown orders”—which has drawn widespread public attention, the Action Plan explicitly states that no uniform, one-size-fits-all shutdown or production‑restriction ratios will be imposed on high-pollution, high-energy‑consumption sectors such as steel, building materials, casting, nonferrous metals, chemicals, and coking. The most notable feature is that staggered production schedules will be determined based on actual conditions.

　　In line with the guiding principles of the CPC Central Committee and the State Council’s Three-Year Action Plan for Winning the Battle for Blue Skies, the “Comprehensive Action Plan for Tackling Atmospheric Pollution during the 2018–2019 Autumn and Winter Season in the Beijing–Tianjin–Hebei Region and Surrounding Areas,” after soliciting public input, was officially released recently. Addressing the issue of production shutdowns and output restrictions—commonly referred to as “shutdown orders”—which has drawn widespread public attention, the Action Plan explicitly states that no uniform, one-size-fits-all quotas for such measures will be imposed on highly polluting and energy-intensive sectors—including steel, building materials, casting, nonferrous metals, chemicals, and coking. The abolition of blanket shutdowns and production cuts marks a significant shift, with the key innovation being the adoption of tailored, staggered production schedules based on actual conditions. This approach underscores that environmental protection must yield to the need to safeguard people’s livelihoods.
　　The work stoppage order is no longer mandatory.
　　According to the recently released “Comprehensive Action Plan for Tackling Air Pollution in the Beijing–Tianjin–Hebei Region and Surrounding Areas during the 2018–2019 Autumn–Winter Season,” from October this year through March next year, the average PM2.5 concentration in the Beijing–Tianjin–Hebei region and its surrounding areas is expected to decline by approximately 3% year on year, while the number of days with severe or worse air pollution is projected to decrease by about 3% compared with the same period last year. Starting this month, all localities are required to strictly enforce the special emission limits for atmospheric pollutants applicable to the thermal power, steel, petrochemical, chemical, non‑ferrous metals (excluding alumina), and cement industries, as well as industrial boilers.
　　With regard to “coal-to-gas” and “coal-to-electricity” conversions, local authorities are to determine, on the basis of annual and heating-season additions in gas supply and actual power‑supply capacity, the number of residential households to be converted. By the end of October, the 2+26 cities are expected to have completed the replacement of loose coal for 3.62 million households. Progress on these key tasks must be reported by all provinces (municipalities) and central enterprises by the 5th of each month, starting this month.
　　Liu Youbin, spokesperson for the Ministry of Ecology and Environment, stated that measures to ensure public livelihoods—such as heating supply—should be further strengthened. Cities are required to formulate staggered‑production implementation plans tailored to their local industrial structures and the pollution‑emission performance of enterprises. Moreover, based on monthly air‑quality forecasts for the heating season, local authorities may appropriately shorten or extend the duration of staggered production.
　　The manufacturing sector is sluggish, and environmental protection must yield to people’s livelihoods.
　　According to information released by domestic and international media, the U.S. has imposed a 10% tariff on $200 billion worth of Chinese imports, which could rise to 25% on January 1, putting pressure on China’s economy. As businesses prepare to cope with the impact of these tariffs, China’s manufacturing sector is losing momentum.
　　China’s latest official manufacturing Purchasing Managers’ Index (PMI) fell from 51.3 in August to 50.8 in September, marking an eight-month low. Meanwhile, the Caixin manufacturing PMI dropped to 50.0, dangerously close to the contraction threshold of below 50.
　　Chinese manufacturers of finished goods exported to the United States have been hit particularly hard, leading to a reduction in their procurement of raw materials. For example, U.S. tariffs on finished products containing polyvinyl chloride (PVC) have depressed demand, causing domestic prices in China to plunge 9% within a single week at the end of September, reaching a nine-month low.
　　As China’s economy slows, implementing more pragmatic environmental regulations could help stimulate economic growth. According to a report by the official Xinhua News Agency on September 27, Beijing, Tianjin, Hebei, and surrounding areas will aim to reduce both the average PM2.5 concentration and the number of days with elevated PM2.5 levels by 3% year over year.
　　The chemical industry is expected to emerge from the trough of the “environmental protection storm.”
　　According to reports from various sources, the national and local governments are currently adopting a more flexible approach: “By implementing a differentiated strategy, enterprises that excel in pollution control will be exempt from production‑output restrictions.”
　　For chemical companies, this could mean that older, smaller, and more polluting plants will be targeted, while newer facilities remain unaffected. With the relaxation of new regulations, plant shutdowns are likely to decline. In recent months, such closures have been a key drag on prices. Nevertheless, plans to relocate factories from urban areas to chemical parks are expected to continue. In 2017, an environmental‑compliance crackdown and subsequent shutdowns forced roughly 40% of China’s total production capacity to temporarily close, with as many as 80,000 plants found in violation of emission targets. Chlor-alkali plants, in particular, saw their operating rates plunge to 50–70%.
　　On the positive side, last year’s mandatory shift from coal to natural gas resulted in rationed supplies of natural gas for chemical production. Under the new regulations, a blanket ban on residential coal‑based heating will no longer be enforced this winter. Instead, local governments will set targets aligned with regional natural gas availability and power‑generation capacity, thereby helping to stabilize supply for chemical production this winter.