Efforts required to leverage city-led growth

Over the last decade, China has been working to shift from a manufacturing-led growth model fueled by low-cost labor to an innovation-led, higher value-added model underpinned by strong productivity gains. Urbanization is critical to facilitate this shift, not least by enabling economies of scale.

Currently, although China is the world's most populous country and its second-largest economy, the country's urbanization rate remains well below the global average. Only half its population lives in urbanized areas, and less than 10 percent are permanent residents in its megacities.

It is China's megacities where the greatest potential to fuel future progress in productivity - and thus GDP growth - is to be found. So far, China has four "first-tier" cities: Beijing, Shanghai, Guangzhou, and Shenzhen.