Footage from Harbin on state broadcaster CCTV showed a screen full of charcoal-brown smog, with faint shapes and colours beneath hinting at roads, cars and traffic signals.
Drivers who jumped red lights because they could not see them "will not be penalised", the state news agency Xinhua quoted local traffic official Xue Yuqing as saying.
Figures from monitoring stations in central Harbin showed concentrations of PM2.5 -- tiny airborne particles considered the most harmful to health -- were above 900 micrograms per cubic metre, almost 40 times the World Health Organisation's recommended standard.
The overall air quality index was given as 500, the maximum level on the Chinese scale, but was described as "beyond index".
Elementary schools cancelled classes, long-distance coaches halted operations and highways were shut, although multiple-car crashes still occurred, the reports said.
The smog in Harbin, in far northeastern China, came as the city activated its public heating ahead of the frigid winter, the Beijing Times reported.
Pollution from rapid development and heavy coal use plagues wide swathes of China, prompting public criticism and pledges from the country's new leadership to make improvements.
A thick smog that covered the capital Beijing earlier this year -- with similar PM2.5 levels as Harbin on Monday -- made global headlines.
The State Council, or cabinet, said in June that among other measures it would hold local officials accountable for improving air quality.
Air pollution contributed to 1.2 million premature deaths and 25 million healthy years of life lost in China in 2010, the US-based Health Effects Institute said in March.