China to halt new projects in pollution ‘red zones’

China will halt major projects in regions with high levels of pollution, the official Xinhua news agency reported late on Wednesday, underscoring an environmental crackdown that is starting to hit businesses around the country.

Chinese authorities will roll out a new pollution alert system for regions ranging from the cleanest “green non-alert zones” to the most severe “red” zones, where the environment and natural resources are severely strained.

“For red-alert areas, government authorities will stop granting approval on relevant projects,” Xinhua reported, citing a document from the ruling State Council, China’s cabinet. “Enterprises causing severe environmental and resource destruction will face punishment, including fines, production restrictions and shutdowns,” the report said.

Regions will also be categorised as “overloading”, “near overloading” or “not overloading”, depending on the level of strain on their environmental and resource capacity.

China’s war on pollution has ramped up steeply this year, rattling the country’s ports, commodities markets and factories across the country’s smog affected north. Even firms in higher tech sectors like the car industry have started to take a hit.