Authorities in Dalian, Liaoning province, have ordered the immediate shutdown and swift relocation of a controversial chemical plant.
The radical move came after tens of thousands of people took to the streets to protest about the threat of pollution.
Vast crowds of protesters swarmed into People's Square in the heart of the city yesterday morning, calling for the closure of the Fujia Petrochemical Company plant, which has been under intense scrutiny after a typhoon last week came close to causing a toxic spill, according to pictures and postings online.
Some scuffles broke out as demonstrators clashed with hundreds of riot police - some wearing full body armour - in front of the city's government headquarters, Xinhua reported on its English-language news wire.
The city government held an emergency meeting at 4pm and an announcement was made shortly afterwards that the plant would be shut immediately and arrangements for it to be relocated made as soon as possible, Xinhua reported.
The news agency said thousands of protesters took part, but online postings and local residents said hundreds of thousands of demonstrators were involved.