The Chinese state that they expect that Beijing will meet environmental standards for clean air for athletes in the 2008 Olympic Games.
Beijing expects to keep sulphur dioxide levels down to an acceptable level for over half of the year, which would allow the air to meet an international standard of "moderate" or better.
Unfortunately China uses coal as its primary source of energy, this makes it the world's largest producer of sulfur dioxide pollution. Add in the construction sites and car pollution, and the ability to meet this target comes into question.
That being said it is more than likely that, if required, there will be some form of political "fudge" to enable the Games to go ahead.
Money comes first.