This paper estimates trends in absolute poverty in urban China from 1988 to 2002 using the Chinese Household Income Project (CHIP) surveys. Poverty incidence curves are plotted, showing that poverty has fallen markedly during the period regardless of the exact location of the poverty line. Income inequality rose from 1988 to 1995 but has been fairly constant thereafter. Models of the determination of income and poverty reveal widening differentials by education, sex and party membership. Income from government anti-poverty programs has little impact on poverty, which has fallen almost entirely due to overall economic growth rather than redistribution.