It ranks 294 Chinese cities using various metrics, including developmental sustainability, business climate and quality of life, among others.

"Smog has become a [core] problem for some Chinese cities," according to the compilers of the ranking, now in its 12th year. "Its severity is ever increasing and areas directly affected by it are ever expanding."

The central government declared "war" on pollution in March.

And last month, the legislature passed amendments to the environmental protection law, the first revisions to the statute in 25 years, which allow for tougher penalties on polluters.

One of the areas hardest hit by smog is the Jing-Jin-Ji region, shorthand for the expanse of Beijing-Tianjin-Hebei. To improve air quality, Beijing has ordered many of its big polluters out of the capital, which often means they go to the surrounding area.

In the coming three years, another 1,200 large polluters are expected to be kicked out of Beijing.

The National Development and Reform Commission is drafting policies on integrated planning for the area, which are expected to be published by June.

Beijing received relatively high marks for liveability despite severe air and traffic issues. The capital ranked 41st, up 33 places from last year.

"High housing prices, air pollution and traffic congestion detract from Beijing's liveability," said Yang Jie, one of the report's co-authors. "Yet, the city remains competitive thanks to its well-educated citizenry, high quality medical and educational institutions, developed commercial environment and public infrastructure."

Beijing ranked fourth, behind Hong Kong, Shanghai and Shenzhen in terms of "sustainable development".