MODERN LIFE: Yu Xiuxiang, a farmer in Jimo City in east China's Shandong Province, tends to vegetables in a solar cell-powered greenhouse on March 14 (NING YOUPENG)

"For the economy to take off, China must strive to complete its economic restructuring before that time, otherwise, it can only be stopped halfway, falling into the middle-income trap," Zhang said.

"The case for reform is compelling because China has now reached a turning point in its development path. Managing the transition from a middle-income to a high-income country will prove challenging," said former World Bank President Robert B. Zoellick.

Li Yining, a renowned Chinese economist and Dean Emeritus of the Guanghua School of Management of Peking University, said that China needs to promote economic reforms that cross into "uncharted waters."

"With the transformation of China's growth pattern, the country's efforts to boost consumer spending and reform income distribution will be further pushed forward, and these will act as the driving force for national economic development," said Zheng Xinli, Vice Chairman of the China Center for International Economic Exchanges, a government think tank.

If economic reform is properly carried out, China will be capable of maintaining an 8-percent growth in GDP for another 20 years, he predicted.

"Agricultural modernization is the key driving force for China to escape the middle-income trap," Zheng said.

As a consequence of China's agricultural modernization process and its accelerated efforts to transform the sector from a long-established extensive to an intensive model, more rural workers will be transferred into urban areas, which means that the labor force will shift from the agriculture to the industrial and service sectors, Zheng said.

In 2012, the output of China's agricultural sector was about 10 percent of the national GDP, while farmers accounted for 36 percent of the national labor force, research by Zheng's think tank showed.

"The low productivity of the agricultural sector is the main reason for the broad income gap between rural and urban residents," he said.

The Central Committee of the Communist Party of China (CPC) and the State Council, China's cabinet, released a document on January 31 pledging to accelerate agricultural modernization through the establishment of large family farms and measures to improve intensive production.

"The move requires setting up a system to ensure the effective supply of important agricultural products, increase farmers' income and improve their livelihoods, as well as push forward reforms in rural areas," the document said.

"One of the most urgent things is to remove restrictions on investing in the agricultural sector," said Zheng, citing greater capital requirements in development of large modern farms and purchasing mechanical equipment.

According to Liu Yonghao, Chairman of the New Hope Group, one of the largest suppliers of meat, egg and dairy products in China, the government should reform the financial system to support the development of family farms.

"Belonging to small and medium-sized enterprises (SMEs), family farms are facing more difficulties than larger enterprises in fundraising," Liu said.

In order to better support SMEs, it is a must to adopt interest-rate liberalization and allow private capital to set up financial institutions, according to Zheng.

"Liberalizing the financial sector will also improve the allocation of capital in support of the transition to an innovation-based economy while lowering the cost of, and improving access to, finance," Zheng said.

Zhang Yongjun, a research fellow at the China Center for International Economic Exchanges, calls for greater efforts to help rural workers settle in cities.

A study by the Academy of Macroeconomic Research of the NDRC shows that high-income countries should meet three conditions: Urban residents should be more than 70 percent of the population; the agricultural sector's labor productivity should be close to those of industrial and services sectors; and rural residents' income should be close to or more than that of urban residents.

"Policies should be improved to include migrant rural workers in urban social security systems, and to provide them with employment opportunities," Zhang Yongjun said. "So the promotion of agricultural modernization should be in line with the process of urbanization and industrialization."

Addressing inequality

At a press conference during the full session of the 12th National Committee of the Chinese People's Political Consultative Conference (CPPCC) in March, Li of the Peking University said that if China wants to avoid the middle-income trap, it has to reform its income distribution system.