At this time of the year, smog in Beijing, China, can be overwhelming. Throughout the city this fog/smog prevents the sun from shining through. But, the pollution problems have not clouded financial activity. Encouragingly, we continue to see a further opening up of capital markets in China in addition to more regulatory surveillance.

While the smoggy air deters me from walking the streets outside, the city’s indoor malls are extensive. So, taking a break from my e-mails and research, there were plenty of shop windows indoors to look at during my recent visit to Beijing.

The challenge of environmental pollution is something that, I’m afraid, China will be challenged with for some time to come.

While coal-fired electricity has been declining in China, given its tremendous power needs, coal is hard to replace. China remains the world’s largest coal consumer.

However, renewable energy has been a key area of focus, outlined in China’s 13th Five-Year Plan. Older coal plants have been taken offline and retired, while others have been subject to stricter controls. The US Energy Information Administration has predicted coal use in China could peak in 2018, then begin to decline as renewables replace more of China’s electricity generation.1 So hopefully, in the future the skies will again be clear in Beijing.