The smog is forecast to cover parts of Beijing, Tianjin, Hebei and Henan in northern China, the Beijing Municipal Environmental Protection Bureau said.
The alert will last from tomorrow to Sunday or New Year's Day holiday, it said.
Under the emergency plan, heavy polluting gasoline-fuelled vehicles and trucks carrying construction garbage will be banned from roads. Some manufacturing firms will also need to cut production.
Beijing has a four-tier alert system for pollution, with red the highest, followed by orange, yellow and blue. The orange alert means the air quality index is forecast to exceed 200 micrograms per cubic meter of air for three consecutive days.
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