Beijing Shougang Group, the largest polluter in the Chinese capital city, started to build an environment-friendly steel plant in the city's northern suburb on Saturday, marking a substantive move to help alleviate the city's long-standing pollution problem. 

The plant is located in Beijing's Shunyi District and will produce 1.5 million tons of cold-rolled steel plates when put into operation, reports Beijing News Daily on Monday. 

The Shunyi-based operation will be developed and managed to save water, land and energy, according to the press office of the Group. 

The Shougang Group, also translated as the Capital Iron and Steel Company, was established in 1919 and is one of the country's largest steel-makers. 

Although widely regarded as a flagship enterprise in China's iron and steel industry, Shougang has been vehemently blamed for polluting the capital city in recent years and is considered a potential obstacle for the upcoming 2008 Beijing Summer Olympics. 

In response to the criticism, the company launched, under the approval of the State Council, an ambitious plan to relocate its polluting plants in the neighboring Hebei Province. 

According to the the plan, Shougang has cut its steel output in the past few years and will further reduce the annual production of its Beijing factories to four million tons by 2007. 

By 2010, all the current Beijing-based steel operations will stop and move to Hebei with only the headquarters, research and development sections, sales departments and logistical center staying in the national capital. 

"The relocation will not be a simple duplication transferring Shougang's pollution to Hebei Province," said Zhu Jimin, Shougang's board chairman in a previous interview with local media. 

The company is locating its new venue in Caofeidian, an island 80 km south of Hebei's Tangshan City, covering about 20 square kilometers, and is committed to operating the new plant in an environmentally-friendly way with new equipment and techniques to improve efficiency and cut waste. 

According to sources from the Beijing Environmental Protectin Monitoring Center, the air quality of the Chinese capital has steadily improved in recent years. Last year, 62.5 percent of days were rated as being fine in terms of air quality. 

However, local experts said if the Shougang Group does not move out of the city, Beijing will be unable to meet the air quality standard that the city promised in its bid to host the 2008 Summer Olympics.