Recommendations from the OECD

The OECD China Economic Survey encourages the country to further strengthen market mechanism, enhance skill provision and boost agricultural productivity.

The Chinese labor market is unbalanced to the extent that there are not enough workers at the lower-skilled end and not enough jobs at higher-educated end, said Gurria.

However, it's inevitable that China has to follow in increasing sophistication and knowledge, he continued, suggesting that the country should map skills needed by the market while "upskilling" its labor force.

"It means communication with the market and companies to be able to identify the needs. You have to be very specific and modify the curriculum in vocational schools and training".

China also needs to continue its land reform, encourage market consolidation and grant farmers better access to finance and skills to improve productivity, added Pereira.

"Agriculture in general is primary. The issue is real [in China too] because there are hundreds of millions of people living there. Their standard of living is very important," said Gurria.

He affirmed the effectiveness of e-commerce in improving the agricultural industry, saying that products in rural areas today can be sold in cities because of good communication, transportation and network.

Among migrant workers, there are people who are competent and aggressive and can stay in rural regions to start businesses and do well, added Gurria. "China should be more urbanized than it is".

According to an OECD report on economic inclusiveness, income inequality in China began to fall in recent years after rising rapidly in the period following its market drive. By last year the national Gini coefficient had fallen to slightly below 0.47, still above developed countries but similar to the levels in other emerging-market economies.