Coal-powered industries and heating systems, as well as vehicle emissions and dust from construction sites, all contribute to the smog which has been exacerbated by humidity and a lack of wind.
The order will last until 12:00 on Thursday, when a cold front is expected to arrive and clear the smog.
As well as limits on construction and schools - which were advised to close if they did not have good air filtration systems - cars are only permitted to drive on alternate days, with the day depending on whether a car's number plate ends in an odd or even number. Officials promised additional public transport to cope with demand.