Achim Steiner said hundreds of thousands of people were affected by premature death and respiratory illnesses because of poor air quality.
But the government is planning policies that could result in a cleaner, greener China, he added.
Mr Steiner is in Beijing to launch a “green economy” report.
The document, which has taken three years to prepare, outlines how countries can maintain economic growth and improve the environment at the same time.
Mr Steiner, executive director of the UN Environment Programme (UNEP), praised China’s approach on this issue.
It is now the world’s biggest investor – spending $49bn (£31bn) last year – on renewable energy, a figure that will grow over the next five years.
But in one respect the UNEP chose a bad day to trumpet China’s green credentials: Beijing was covered with a blanket of smog.
The city authorities said the air was only “slightly polluted”, but at least one Chinese official believes this monitoring system is “rather lax”.
The US embassy in Beijing, which measures air pollution in the Chinese capital using a stricter standard, said the pollution was “hazardous” at some points on Wednesday.
The UNEP report, entitled Towards a Greener Future, suggests that for an investment equivalent to 2% of global GDP the world could start creating sustainable and environmentally friendly economies.