Introduction In an economically competitive world, most countries around the globe constantly compete to attain the top position in the international market in order to reap the benefits that come with such progress. For this reason, most countries insist on industrialization with some showing more zeal as compared to others through political policies. Although industrialization has been a big part of global economic growth since the end of the Second World War, it has also played a significant role in increasing the number of environmental risk factors such as pollution. Such risks result in a bittersweet experience for most economies, as although the process generates economic gains; its effects on the environment often lead to the loss of the same gains or more. This concept results in a dilemma for such governments when choosing between making policies that give developmental success and those that protect the environment. China is among the many world countries experiencing such a dilemma, which makes it one of the best choices to explore in determining the economic effect of industrial pollution on a country. Although China’s problem is more recent than that of most other countries, the potential economic devastation that industrial pollution is causing is significantly higher due to several factors. This paper gives a brief overview of the problem in China especially with regard to air pollution, its impact on the Chinese economy, some of the steps that the government has taken to combat the problem, and the effectiveness of such policies. The paper also considers possible solutions and explores the outcomes of the solutions on the country’s economy and overall position in the global market. Overview of the problem China is indisputably the most populous nation around the world and it has approximately 1.3 billion people residing within its borders, out of the world’s approximately eight billion people. Some of its largest cities, which in turn create attraction points for most multinational businesses, include its capital city, Beijing, Shanghai, and Hong Kong. Although the country’s land area makes it the second largest country in the world, the large population living within the country means that the amount of land area available per individual is much smaller than in most other industrialized countries in Asia and the West (Chan 385). One of the greatest advantages that such a large population affords the state is the generation of a sustainable labor force, which makes industrialization realizable. Countries such as Saudi Arabia have often had to adjust their international trade policies to attract expatriates to the country to supplement their insufficient labor force for the ultimate progression of their economies. Secondly, the large population offers a ready market for industrial products, thus reducing the country’s need to depend on the international market for sales and consumption. Regardless of the numerous advantages that the large population presents to China’s economy in terms of progression of the industrialization process, there are also disadvantages with the main one in this case being industrial pollution. According to reports by the Reuters , about seventy per