China needs 'renewed reform momentum', says OECD survey

China needs a "renewed reform momentum" to sustain long term growth, the Organisation for Economic Co-operation and Development (OECD) has said.

It said the financial sector, urbanization, state ownership and innovation were key areas for reforms.

But it added that China had weathered the global financial crisis better than other OECD member countries.

It said China was on track to become the world's biggest economy by 2016, after allowing for price differences.

"It is well placed to enjoy a fourth decade of rapid catch-up," the OECD said in a survey.

It said that there were signs of China's economic growth picking up pace again after the recent slowdown.

However, it warned that in order "to sustain vigorous and socially inclusive growth over the longer run, renewed reform momentum is required".

Among the recommendations the OECD made include:

However, the OECD warned that while China's economy had rebounded it continued to face various risks.

On the external front, a slowdown in the global economy poses a key risk to China, the survey said.

Meanwhile on the domestic front, it listed potential threats including rising property prices, which have triggered fears that new asset bubbles could form, along with "excessive off-balance sheet financing" by banks and local governments.

At the same time, the survey said that income inequality and an ageing society were likely to be a source of tension in the long run.

However, it said that these issues can be addressed it China continues to reform key sectors in the near future.