BEIJING, July 8 (Reuters) - Two key measures of pollution in China have fallen slightly in what the country's environmental regulator cast as a victory in the fight for more sustainable development, state media reported on Tuesday.

Persistent smog over Olympic host Beijing's skies and a massive algae bloom in sailing venue Qingdao have highlighted China's environmental concerns a month ahead of the Games.

Emissions for sulfur dioxide, which belches from smokestacks and causes acid rain, fell by 4.7 percent in 2007 compared with the same period a year before, the official newspaper of China's Ministry of Environmental Protection said.

COD, or chemical oxygen demand, a measure of water pollution, dropped by 3.2 percent in 2007, it added.

Sulphur dioxide and COD are primitive indicators of overall environmental health, and do not reflect the many other chemicals that spoil China's air and waterways.

China has pledged to cut pollution levels for the two indicators by 10 percent betweeen 2006 and 2010, but failed to meet its target in 2006.

The result was "heartening", but no cause to rest on laurels, an editorial in the paper warned.

"The environmental situation is still grim. We are still under enormous pressure to meet the targets in the (five-year) plan," the editorial said.

Beijing, which has spent more than 120 billion yuan in Olympic clean-up efforts but remains almost permanently cloaked in smog, had reduced sulphur dioxide by 13.8 percent, making it the best performer out of 31 provinces, regions and cities, the paper said.

The results come as thousands of troops and volunteers toil round the clock to remove algae from Olympic sailing competition areas in Qingdao.

Beijing has also demanded factories in surrounding provinces stop work or cut production to clean the city's air, which has caused health concerns for a number of Games athletes. (Reporting by Ian Ransom; Editing by Bill Tarrant) (For more stories visit our multimedia website "Road to Beijing" at http://www.reuters.com/news/sports/2008olympics; and see our blog at http://blogs.reuters.com/china)

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