Beijing's air quality has improved as much as 16 per cent over the past year, but the gain has come at costs of jobs and growth, recently released figures suggest.

Key points: Figures show Beijing's air quality has improved 16pc over last year

Figures show Beijing's air quality has improved 16pc over last year But air quality improvement could threaten economic growth

But air quality improvement could threaten economic growth Government plans to reduce pollution by 40pc by 2020

Government plans to reduce pollution by 40pc by 2020 2,500 factories marked for closure in 2016

To continue the downward trend, more painful decisions will have to be made and that could further threaten China's economic growth.

On the outskirts of Beijing lie the rusted relics of a coal-fired brickworks in the village of Chaomidian.

It was one of the first factories to be shut down in a government campaign to close the big polluting, small factories that surround Beijing.

Nearly 200 workers lost their jobs at the brickworks when it was shut down in December 2014.

Many were migrant workers and have since returned back to their provinces.

The living quarters lie abandoned with posters and clothes still in the tiny rooms.

Manager and owner Han Feng-ge still lives near the site.

"Our personal loss is around $4 million and families have lost their income," she told the ABC.

"Lives have been destroyed."

Ms Han said she was promised compensation from the China Environment Protection Bureau and the Beijing Finance Bureau, but has so far received nothing.

She said the thought of her predicament makes her cry.

"If the Government doesn't keep their word, if I don't get the compensation money, I will totally go down," she said.

"I can't rebuild."

'No future' for village without factory

The local community is also feeling the pain, with much of the economic activity having stopped.

A transportation business has closed and restaurant owner Jing Wenbing said he might have to pack up and go too.

Tiananmen Square on a clear and smoggy day. ( AFP: Wang Zhao )

"We've lost half our income. We depended on the workers and since they left it's hard to survive," he said.

Mr Jing said he cannot see a future for Chaomidian.

"There is no development for this village. This village doesn't have any enterprise — no factory anymore," he said.

"The young people want to work but they too have had to leave.

"Only the older people are left behind."

Many other villages that ring Beijing may suffer the same fate as Chaomodian.

The Government has slated 2,500 factories for closure this year as they prioritise clear air over jobs.

The state plans to reduce pollution by 40 per cent by 2020 and has allocated more than $3 trillion for investment in environmental protection.

But much more action is needed if Beijing is to get clean air — more coal-fired power plants will have to be closed or relocated and many of Beijing's old-style cars and trucks have to be taken off the roads.