Smokers in China cost the country at least 250 billion yuan (about $31 billion) last year, the Beijing Evening News reported Friday.
According to a research report of China Centre for Economic Research of Peking University, the health costs associated with treating 23 smoking related illnesses was about 166.6 billion yuan, accounting for almost one percent of gross domestic product (GDP).
Illnesses caused by passive smoking, fires, environmental pollution and lost work time has an estimated cost of 86 to 121 billion yuan, accounting for between 0.47 and 0.66 percent of GDP, the report said.
According to the statistics of the World Health Organisation (WHO), there are currently 350 million smokers in China and 700,000 people die from smoking every year.
Experts suggest cigarettes should be more heavily taxed making the habit more expensive encouraging people to quit smoking.
WHO said China's smokers consume 1.6 trillion cigarettes every year, accounting for one third of the world's total consumption.