Pollution is a serious problem in parts of China (although certainly not all). I lived in Shanghai for 5 years, and the pollution in that city isn't all that bad, and improved each and every year I lived there. Most of the pollution was caused by automobiles and construction; which is similar to many US large cities such as Los Angeles. At any rate, what doesn't help the issue is confusing the issues with factual errors such as the ones you are spreading in the quoted sentence. For citizens with a valid hukou, none of the above is true.
Agreed. Although, northern china is not particularly pollution free.
I have spent the past eight years going back and forth to China, living months at a time in Beijing, and living in Inner Mongolia (the province of China, not the country: standard answer. Nobody seems to know this) for most of 2008.
In northern china, much of the "pollution" is dust from the gobi. I could go on for a while about how this came to be created, but it is man made. Not a modern problem, but exacerbated during our lifetimes. It does make for fantastic light in Beijing.
In addition to that, a large portion of the energy is derived from the burning of coal, often in open fires. It is quite common to see compressed coal being shuttled around via truck and bicycle, this is used for cooking and heating in the poorer sections of Beijing (and all of Inner Mongolia: although they use chunks of coal, since it is one of the couple of provinces where it comes from).
The smoke stacks in the pictures are probably coal fired power plants.
Over the time that I have been visiting China, the pollution has gotten significantly better. Modernization was the initial goal for China, but lately the government has been attempting to put the environment further up the importance ladder.
At the very least, they are attempting to reduce the dependence on small, very dirty, coal fired power plants. Instead attempting to expand the cleaner larger plants. These, at least, have some stack gas scrubbers / NOx and SOx removal capabilities, and particulate removal.