"If the country cannot accelerate its transition, by 2020 its growth momentum would be very questionable as basically all the necessary infrastructure construction, such as its railway network, would be completed."
Consumption contributed more to GDP growth than investment in 2012.
Last year, domestic consumption in China accounted for 26 percent of US consumption, while its investment was 235 percent of that in the US, according to figures from Citi.
Jeremy Stevens, China economist at the South Africa-based Standard Bank Group, said: "A shift in emphasis away from activity underpinned by the simple mobilization of resources - land, labor or capital - to a smarter, more efficient economy is necessary.
"Without change, the economy will simply bounce from sugar rush to sugar rush - short-term highs, with no lasting value.
"The rebound in activity since July has not convinced us of its durability."
Stevens added that China's investment-led model still has a heartbeat, but funding conditions are challenged.
In addition, "non-performing loans in the banking sector will rise sharply and the sector will under-perform, hurting the growth prognosis further".
Citi's report added that exterior demand is unlikely to show any substantial improvement this year, with growth in both exports and imports remaining single digit.
It said the global economy will grow by 2.6 percent this year, and 3.1 percent in 2014, and that any global rebound to the levels before the economic crisis of 2007-08 is unlikely before 2015.
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