Recent health reform initiatives in China have led to changes in the equity of health financing. However, the outcome of these changes has not been adequately studied. This three-year project aims to assess the effectiveness of China’s health reform initiatives and thereby help develop policy recommendations for improving equity of health financing in guaranteeing basic health care in urban China. One thousand eight hundred urban households in three cities will be surveyed during the first two years of the project to analyze income, health care needs, and the financial burden of healthcare on each household. An additional survey will determine health spending of local government and social health insurance schemes. In the third year, these research findings will be analyzed and disseminated, concluding with a national seminar on the equity of health financing. Papers will be prepared for publication in international journals