Authors: Haibo Li, Dong Wang

This paper evaluates the impact of China’s 2018 “Winning the Blue Sky Defense Battle” (WBSDB) Action Plan using a balanced city-level panel of 31 provincial capitals and municipalities from 2013 to 2024. Using a Difference-in-Differences (DID) framework with the Synthetic Control Method (SCM), we examine the evolution of PM₂.₅ and SO₂ under China’s targeted anti-pollution campaign. In the main specification, the treated cities are Beijing, Tianjin, and Shanghai, while a broader 11-city coding is reported as a robustness check. The baseline DID suggests a negative but statistically insignificant average effect on PM₂.₅, whereas the effect on SO₂ is not robust. Dynamic event-study estimates indicate that the policy is better understood as reversing a worsening pre-policy trajectory rather than generating an immediate discrete drop. To complement the DID evidence, we implement SCM for Shijiazhuang, the provincial capital of Hebei, which serves as the closest city-level proxy for Hebei in the current dataset. We also find that a heavier secondary-industry share is associated with worse PM₂.₅ outcomes, consistent with the notion of an industrial “structural shackle.” Taken together, the results suggest that China’s air-quality governance has moved beyond the stage of relatively easy end-of-pipe gains and entered a more difficult phase in which further progress depends on deeper industrial restructuring.