Only Cambodia and Congo have a lower rate than China worldwide.
Currently, China has more than 300 million smokers, including 290 million men, and at least 1.2 million people die from smoking-related diseases each year on the mainland, official statistics indicate.
Because of lax regulations on smoking in public, about 740 million non-smokers are affected by secondhand smoke.
The plan will reduce the passive smoking rate to less than 60 percent by 2015, from the current 72.4 percent.
The tobacco tax continues to be a major source of income for the government, and the industry provides more than 20 million jobs, according to the plan.
The tobacco industry contributed 498 billion yuan ($79.8 billion) in taxes in 2010, accounting for approximately 6 percent of total government income that year, official statistics show.
"The tobacco industry plays a role in increasing government income and creating jobs," said the plan.
More than 80 percent of the nation's tobacco leaf production and over half of cigarette-making is located in underprivileged areas on the mainland, which rely heavily on the tobacco industry for socioeconomic development.
It will take some time to develop a substitute for tobacco industry, the plan said.
"We have to consider the realities while implementing tobacco control," said Zeng Guang, chief epidemiologist at the China CDC, and a volunteer in tobacco control campaigns.
Contact the writer at shanjuan@chinadaily.com.cn
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