China's business hub of Shanghai has slacked off in efforts to improve the environment, levying fines too small to deter polluters, hundreds of whom have flouted closure orders, authorities said.
Standards had fallen and some of Shanghai's environmental work had grown "slack," an inspection team found after a month-long investigation late last year, the Ministry of Environmental Protection said.
The environmental protection work that remains undone could hold back Shanghai's development, the ministry said.
"Shanghai's environmental protection work has had obvious successes, but environmental quality remains a prominent weak point, affecting the city's overall development," it said.
From 259 water samples tested, 88 were found unfit even for farm and industrial use, falling below the ministry's "grade V" categorization, it said, adding that overall water quality in some districts had worsened since 2013.
It singled out Shanghai's decision to postpone from 2016 until the decade's end a target of raising treatment standards for urban waste water, saying its plans to improve urban sewage and waste treatment had also fallen behind schedule.
Ageing landfills are still leaching into Shanghai's water supply, and trash is still being illegally dumped, it added.
Law enforcement in Shanghai, one of the richest cities, was still inadequate, the team found, with fines too light to discourage persistent polluters.
It said 800 enterprises ordered to stop production since 2013 were still operating.
Local governments are proving to be one of the key battlegrounds in its "war on pollution," with many accused of turning a blind eye to environmental violations so as to protect valuable sources of revenue and jobs.
Teams of environmental inspectors have fanned out across China since last year, with powers to make surprise checks and hold local leaders to account.
While there has been progress in tackling air pollution, water quality in several regions has significantly worsened.