China is testing a medical assistance system for the low-income people in 1,865 counties and county-level districts, according to the latest report on China's medical development program.

More than 14.4 million low-income urbanites, accounting for 64 percent of the poverty-stricken population in Chinese cities, are covered by the medical aid system, said a report released by the National Health Industry Management Association.

Since the program was launched in March 2005, China had allocated 2.19 billion yuan (US$290 million) by the end of 2006 to help 3.8 million people who need medical aid.

The government of Yantai, a coastal city in east China's Shandong Province, has stipulated that low-income people living in the city can apply for medical aid when they get severe diseases, and 70 percent hospital fees can be remitted at most.

Soaring medical costs are the most notable social problem in China. Medical expenses have surpassed expenditure on education and transportation.

This year the central government said it would start basic medical insurance covering major illnesses for urban residents, with the government subsidizing the poor.

(Xinhua News Agency August 4, 2007)