Half A Million Square Kilometers Of Heavy Smog Force Beijing To Issue "Orange Alert", Close Factories

On Sunday, Beijing issued its highest smog alert of the year, upgrading it from the yellow of the past two days to orange, second only to red. According to local CCTV, heavy smog covered an area of half a million square kilometers around Beijing-Tianjin-Hebei region, as heavy air pollution hits 31 cities.

Xinhua reports that the municipal weather center said humidity and a lack of wind would mean the smog will linger for another two days, before a cold front arrives on Wednesday.

On Sunday, the reading for PM2.5, airborne particles smaller than 2.5 microns in diameter, hit 274 micrograms per cubic meter in most parts of the capital. Indicatively, the World Health Organization (WHO) considers only 25 micrograms to be a safe level.

Beijing has recommended that residents minimize outdoor activities and urged people with respiratory diseases as well as the elderly to stay at home.

It wasn't just Beijing: moments ago Shanghai joined China's capital in issuing an orange fog alert. The local government asked for heightened management of airports, highways and ferry terminals as heavy fog covered western and southern parts of the city, according to a website run by the Shanghai Meteorological Service said. Visibility is limiting visibility to 200 meters in Minhang, Songjiang, Qingpu, Baoshan, Jiading and Chongming areas, the website said. Orange is the 2nd-highest of 4-alert levels

In March, four types of pollution alerts - blue, yellow, orange and red - were introduced by Beijing's Environmental Protection Bureau. All factories are to be shut down during orange alerts. Heavy vehicles, such as construction trucks, are also completely banned during orange and red alerts. Furthermore, construction sites should stop the transportation of materials and waste while heavy-duty trucks are banned from the roads.

In other words, the local economy shuts down.

This is good and bad news: the bad news is that upcoming Chinese data will continue to be weak, which however will be blamed on the industrial shut down due to the surge in smog, and permabullish pundits will "excuse" the upcoming bout of weak data as being weather related, something the US meteoreconomists have become all too adept at. The good news, is that as every Pavlovian dog-cum-central bank experts knows by now, more economic weakness means more bets for central bank intervention, means higher stock prices.

The municipal environment watchdogs have reinforced checks of discharge from coal-fired plants, outdoor barbecues and burning.

And this is what China's capital looked like this morning.