Many policies and measures for poverty alleviation have been undertaken by the Chinese government, but few researchers have explored its experience and lessons. This research focuses on household needs like food, clothing, housing, household equipment and supplies, transportation and communication, education and entertainment, healthcare; and also focuses on food items such as grains, meat, eggs, milk, vegetables, fruits and others in urban China. In poor households, the average disposable income per capita is less than or near per capita expenditure; and the Engels coefficient is often over 40%. The data from 1997-2012 in this research is in the provincial level from the Information Website of Development Research Center of the State Council (or “DRCnet”). The authors used the two stage ELES-AIDS (Almost Ideal Demand System) to estimate the price elasticity and expenditure elasticity of the household’s expenditures. According to the results, it is recommended that the government should follow economic law and improves policy efficiency, especially its food policy to alleviate the poverty of low income residents.