"As China prepares for the next wave of urbanisation, addressing environmental and resource constraints will become increasingly more urgent because much of China's pollution is concentrated in its cities," said the joint report by the World Bank and the Development Research Center of the State Council, China's cabinet.
High mortality levels and other health problems from China's notorious air pollution are estimated to cost the country from $100 billion to more than $300 billion a year, said the report, which was 14 months in the making.
Writing in the Lancet in December, former Chinese health minister Chen Zhu cited studies showing air pollution caused up to 500,000 premature deaths a year in China.