The first year I came to China, I ran the Great Wall Marathon. The second year I was part of a cycling team that would train by the river (the cleanest place inside the city) twice a day, but I had to stop as the 10 minute commute to the river took 30 minutes to recover from. This January the PM 2.5 level reached 969 at one point, and regularly exceeded 800 for 3-4 weeks. Our 3 year old son had pneumonia, bronchitis and exacerbated asthma, and we were told by the doctor that he might not survive another winter in the city. (It's worth noting that his lung problems weren't all due to pollution; he already had problems with his lungs before coming to us). We hadn't finished the adoption process by that point, but we managed to leave about two months after we had all the documents. By this point I had stopped doing almost any exercise outside, and pretty much just stuck to swimming as even using my stationary bike indoors was affecting my own asthma. We had two air purifiers running 24/7 which we would clean every couple of months. You would need to thoroughly wash the filters 3-4 times to get most of the dust out. Since coming to Kansas three weeks ago I've started cycling again and take the kids out to the playground every day. All of my family members look visibly healthier.
Honestly, if it weren't for the health problems in China, I would rather be there than most other places. Right now though, it feels a bit like Afghanistan - it's a really interesting country with some great people, and it would be a great place to live if it weren't for a couple of really good reasons. When you first get off the plane on leaving China, you really feel like it's the first time in a while that you've actually been able to breathe freely.
@Aloisius I would agree with Maggie though, the worst time for pollution in the north seems to be in the winter when they use coal to heat all of the apartments and the polluted air just stays around without any rain, snow or wind to clear it away. Spring to fall is much better, and you'll get long periods of time when the PM 2.5 is below 50 even in big cities for significant parts of the day. I would stay away from large cities if you're worried about the air quality, as there are many places where pollution is a small fraction of what you'll see in Beijing. You can check the AQI map for an idea of the current conditions: http://aqicn.org/map/