China and India have improved the lives of more slum dwellers than any other country, the United Nations Human Settlements Program newly launched State of the World Cities 2010/2011 report said.

UN-HABITAT's report, which was launched in Nairobi on Monday night, says that the two countries have lifted at least 125 million out of slums between 1990 and 2010.

"China's achievement has been the most spectators, with improvements to the daily conditions of 65.3 million urban residents who were deprived of shelter," the report said.

Proportionally, China's urban population living in slums fell from 37.3 percent in 2000 to some 28.2 percent in 2010, a relative decrease of 25 percent.

Overall, the report finds that 227 million people in the world have moved out of slum conditions since 2000. At the same time, the study also stresses that 55 million new slum dwellers have been added to the global urban population since 2000.

The report uses the framework of "The Urban Divide" to analyze complex social, political, economic and cultural dynamics of urban environments. The number of people living in slums rose from 777 million in 2000 to 830 million in 2010 the report found. Unless urgent steps are taken, UN-HABITAT warned, that number could rise to 900 million in 2020.

The report stated that Beijing has done a good job improving the living conditions of its poorest citizens by embracing economic reforms and implementing modernization policies that have used urbanization to drive national growth. "Its pro-growth policies, among which is a focus on improving the lives of the poor, have resulted in a reduction in the number of slum dwellings," the report said.

A strategy of enabling slum dwellers to gain access to more than 20 million new and affordable housing units has been particularly successful. "The state did this by using equity grants as a mortgage to get leases on cheap housing built by developers and by giving developers special tax rates to encourage development of cheap homes," the report said.

According to UN-HABITAT, India has lifted 59.7 million people out of slums conditions since 2000. Slum prevalence fell from 41.5 percent in 1990 to 28.1 percent in 2010. This is a relative decrease of 32 percent, "Lessening poverty and improving conditions in slums are part of India's urban development policy."

India achieved this by improving the skills of the urban poor in their chosen businesses and by providing micro-credit loans and basic services within slum settlements the report said.

Increasing urbanization has led to a growth in new slum- dwellers, and the total number of people now living in crowded, substandard housing, often without safe drinking water and sanitation, has increased by nearly 55 million since 2000.

The worldwide number of slum-dwellers now stands at 827 million and is on course to grow to 889 million by 2020.