China recently said that pollution problems are costing its government more than $200 billion a year. The Worldwatch Institute in Washington says 16 of the world's 20 most polluted cities are in China. Despite the efforts of environmental agencies, China's pollution continues to worsen and spread far beyond the country's borders.

This is what Beijing looked like in April.  Fumes and dust mixed with sand blowing from the desert to coat the city in a thick layer of smog.

It has become an all-too-familiar sight for longtime residents of Beijing, such as media executive James McGregor.  

"You can chew on the air in most cities," he said. "The rivers are Technicolor with effluents. This place has gone through a huge economic boom and they've just been ignoring it."

After 25 years of breakneck economic growth, China has admitted that its environmental crisis is getting worse. Environmental researchers estimate that pollution in China causes more than 300,000 premature deaths a year.

At a recent news conference, a top Chinese environmental protection official, Zhu Guangyao, said that pollution problems cost the country more than $200 billion a year, roughly 10 percent of China's gross domestic product.

"We are facing a tough situation in environmental protection and pollution of the water, air, and soil is indeed a prominent problem," he said.  

Some of the country's worst pollution problems come from its heavy dependence on coal. Industry journals say China now consumes more coal than the United States, the European Union and Japan combined.

Coal-burning power plants spew sulfur and climate-changing gases into the air, causing acid rain and contributing to global warming.

Environmental experts say winds are carrying the pollutants from China's factories to the Koreas, Japan and as far away as the United States.

Lester Brown, head of the Earth Policy Institute in Washington, D.C., says the pollution travels beyond the border of China.

"The pollution that comes eastward from China across the Pacific to the western United States carries a lot of mercury with it and that mercury is being deposited in the western United States," he said. "It's also being deposited in the Pacific."

The pollutants are even showing up in some of nature's most pristine areas - such as Lake Tahoe in the western U.S. state of California. Researchers from the University of California at Davis have found that filters in the mountains of Lake Tahoe are darker than ever before because of byproducts of coal combustion blown over from China.

Beijing has passed many clean energy regulations. Starting in July, for example, all new cars sold must meet stricter fuel-economy standards than those in the United States.

Leaders have also ordered crackdowns on some of the worst polluters.

But Brown says local authorities rarely enforce environmental laws passed in Beijing.  

"It doesn't have the staffing even to monitor completely local air and water pollution, much less to enforce it," he said. "So regardless of what is said in Beijing, very little is happening at the grass roots to reduce pollution."

Beijing wants to clean the air in time for the Olympic games two years from now. But as long as rapid economic growth remains the number one priority, China's pollution will continue to soar, while people around the world pay the price.