A company in Gansu Province that discharged more than 83,000 metric tons of untreated water at the Tengger Desert has been shut down and fined 3 million yuan ($484,000).
The Ronghua Industry & Trade Company in Wuwei City also had to pay a pollution discharge fee of more than 180,000 yuan.
The company was also ordered to suspend production and its chairman as well as officials at the district and city governments have been suspended.
Two of of the company's managers were detained.
The polluted area is 23 kilometers east of the city and covers 18 hectares.
Ronghua conducted the discharge through a concealed conduit between May 28, 2014, and March 6. It started producing cornstarch and glutamic acid there in May last year, but equipment needed to prevent and control pollution was not installed.
Majority of the waste water has been collected and transferred to sewage treatment plants, and the remaining pollution will be dealt with later.
In September last year, Ningxia Mingsheng Dye Chemical Company was permanently shut down after it dumped acidic waste water into the Tengger Desert. The dumping threatened groundwater in the area.
The Zhongwei municipal government ordered the said company closed down and demolished and to take measures to restore the environment it polluted.
Many other chemical plants were also found dumping untreated waste in the Tengger Desert but remain unpunished.
A video last year showed areas in the desert dotted with pipes that dumped contaminated waste water that created a number of cesspools the size of football fields.
Residents in the are were complaining that the smell of the waste spreads several kilometers.
The country's pollution problems have grown along with its rapid development.