Poverty is no longer mainly concentrated in specific geographic areas but is scattered across the map, often emerging in families that have experienced individual misfortune such as sickness or accidents, the bank said.

"Traditionally, China has had very successful poverty reduction projects that focused on helping poor areas grow," David Dollar, the World Bank's country director for China, told a briefing in Beijing.

"That continues to be important but one of our new findings is that more than half of the remaining poor in China do not live in officially designated poor villages."

An analysis of poverty in the period from 2001 to 2003 shows a slight decline in the income of the poorest 10 percent of China's population, the World Bank said, confirming earlier media reports.

"Seventy percent of the poor have had some kind of income shock in the past couple of years. Maybe they've had a crop loss or an unexpected health problem or an injury," said Dollar.

"You can go just 100 kilometers (62 miles) from Beijing and find rural villages where there is not a large number of poor but almost every village will have a few families living in poverty," said Dollar.

"Migrant workers from the countryside are usually not among the extremely poor in China but within the cities, they are the relatively poor people."

Overall, however, the World Bank characterized China's economic policies as a success story, with 70 million people being lifted out of poverty in just three years.

In the period from 2001 to 2004, China reduced the number of people living in poverty -- defined as spending less than a dollar a day -- from 16 percent to 10 percent, according to the World Bank.

"We feel the policies the government is pursuing are producing overall reductions in poverty," said James Adams, the World Bank's vice president for East Asia and the Pacific.

China's leadership is increasingly worried about a widening income gap brought about by market reforms which have rewarded people with skills and personal connections, and punished those without.

The income gap is partly blamed for a rise in social unrest, especially in rural areas, and narrowing the divide is a high priority for the current generation of leaders who took over in 2002 and 2003.