China is to set up a fund of 10 billion yuan ($US1.65 billion) to fight air pollution and reward companies that clean up their operations.
Pedestrians wearing face masks in a street in Beijing on 16 January. Photo: AFP
State news agency Xinhua said Beijing would shut 300 polluting factories in the capital this year and publish a list of industrial projects to be halted or suspended by the end of April.
Premier Li Keqiang was quoted as saying rewards would replace subsidies.
Last month air pollution readings in Beijing measured more than 20 times the limit considered safe by the World Health Organisation.
Many cities in China have again been choked by smog this winter, with the problem unusually acute in Shanghai.
