One of the key challenges in 2014 for China’s Central Government will be how it addresses the ongoing issue of air pollution across the country. Rising levels of smog and hazardous PM 2.5 particles (floating particles less than 2.5 micrometres in diameter) have increased public health concerns, leading to greater public commentary about pollution in the nation’s press and social media (where two terms were commonly used to describe the situation in 2013 – ‘airpocalyse’ and ‘Beijing cough’). Official data suggests that 2013 had the largest number of smoggy days for at least 52 years – however the accuracy of official data has often been questioned, with sources such as the US Embassy in Beijing typically reporting higher levels of air pollution than official measures.

Addressing the air pollution problem will require long term changes to China’s energy policy – both in terms of the composition of different fuel sources in the country’s energy mix as well as energy efficiency. Any changes would have important implications for Australia’s economy, as Australia is a major energy exporter to China.

For further analysis download the full report.

• China Economic Comment – January 2014 (PDF, 190KB)