'This obviously is a contributor to acid rain. That doesn't respect boundaries, so that's going to be potentially a problem for neighbouring countries and even further afield,' a western environmentalist said.

On the mainland, most sulfur dioxide emissions originate from coal-burning power plants. The use of coal by industry, such as steel and cement plants, and motor vehicles also contribute.

Coal accounts for most of the mainland's energy consumption. China is the world's largest coal producer.

'The problem is that the standards are not well implemented and the laws are not effective when pollution incidents occur,' said Xu Kezhu , a professor of environmental law at the China University of Political Science and Law.

Although the mainland has laws which require power plants to install equipment to reduce emissions, the number of plants scattered across the country and local protectionism have obstructed enforcement.

'Many companies still have little legal awareness. They either don't use their environmental protection equipment or emit at night,' Professor Xu said.

'In the meantime, local governments don't fulfil their duties as watchdogs or don't punish polluters strictly according to law.'

She called for heavier punishments for all types of polluters.

'Punishments for polluters should be increased and local governments should strengthen implementation of the law,' Professor Xu said.

Chen Dongmei , director of the Climate Change and Energy Programme for WWF China, said difficulties making local governments toe the line was a common hurdle for environmental policies.

'All the policies have the same barriers: something on paper versus something in the real world. The central government wants to do it and realises the importance, but there are still some differences with the local level,' she said.

One way to cut sulfur dioxide emissions would be for the government to support only larger power plants with high efficiency, Ms Chen said. Alternative energy sources were another solution.

Environmental officials gave few details on the calculation of 'economic losses' caused by sulfur dioxide emissions, estimated at about 510 billion yuan last year, but health care costs are a key part.

A study by Fudan University's School of Public Health said air pollution was costing Shanghai alone more than 8 billion yuan a year in health care costs.

Additional reporting by Lillian Yang