Local officials said large crowds of residents gathered on Sunday and Monday in Shifang city to protest against the plant on environmental grounds.
Both police and residents were injured in the clashes as bottles were thrown and cars damaged, they said.
Officials said they would now consult residents on the project.
Local authorities said hundreds of residents and students were involved in the protests, while state-run Global Times, quoting an unnamed police officer, said “several thousand” took part.
A statement on the incident on the city’s Sina Weibo account said the government would not restart the project “until the majority of people support it”.
This is not the first time that protests over the environmental impact of heavy industry plants have broken out in China.
In recent years, the public has become more aware of its rights – and more vocal when it comes to issues of public health.
While China has achieved astonishing economic growth in the past few decades, it has come at a huge environmental cost.
The country’s growing middle class worry about air and water pollution. They are concerned about the impact it will have on their children and are increasingly prepared to protest.
Last year, the authorities were forced to close a chemical plant in the north-eastern city of Dalian following similar protests.
Authorities face a huge challenge – they must balance the demand for continued economic growth against rising public anger over pollution.
“Work teams will be sent to all communities and schools to listen to people’s opinions and suggestions,” they added.”