As a number of cities try to clear the air, specialists in Beijing warn that the pollution and emergency responses to reduce it could damage the economy and tourism.
Authorities in the capital said on Monday they had ordered 58 factories with high emissions to suspend operations. Work at construction sites that could cause dust, such as leveling land, were also halted.
The move followed similar action in Shijiazhuang, in neighbouring Hebei province, where authorities stopped work at more than 700 construction sites.
Both cities have advised young children and the elderly to stay indoors.
The capital has ordered kindergartens, primary and middle schools to scrap
physical education classes until air quality improves.
"Pollution from the 58 factories has been cut, and we believe we can reduce their emissions by 30 per cent," Li Hong, deputy director of Beijing's Economy and Information Technology Commission, said at a news conference held jointly by several departments on Monday.
The factories ordered to halt operations include two cement plants, and others involved in chemicals, metallurgy and building materials, he said.
Up to 30 per cent of government vehicles have also been banned from the capital's roads on heavily polluted days, according to a spokesman for the Beijing Traffic Management Bureau.
Drivers found guilty of breaking the rules face penalties, but the spokesman did not elaborate.
Air quality dropped dramatically on Thursday and steadily worsened over the weekend, said Zhang Dawei, who heads the city's environmental protection monitoring centre.
By Saturday, official data showed the density of PM2.5 - particles of 2.5 microns or smaller that can damage the lungs - had reached 900 micrograms per cubic meter in several Beijing districts.
It was the highest level recorded since authorities began releasing the data to the public in early 2012.
The safe daily level is 25 micrograms per cubic meter, according to the World Health Organisation.
Coal emissions and vehicle exhaust fumes played a major role in the pollution and a low-pressure weather front trapped the polluted air.
"Beijing is a huge city with a lot of heavy industry," Zhang said. "Under certain atmospheric conditions, the pollution is trapped.''
The China Climate Bulletin, released by the China Meteorological Administration on Monday, said hazy conditions primarily occurred in two periods; between January and March and October and December.