As it is, China's jobless rate remains high, especially in urban areas, the OECD said, with a "rapidly increasing number of college graduates struggling to find jobs".

China's official unemployment rate has hovered around 4.1-4.3 percent on average for years, even during the 2008/09 financial crisis.

Still, the OECD noted that China has scope to further loosen monetary and fiscal policies if necessary to boost growth.

China cut interest rates twice in the space of four weeks earlier this year, reducing one-year borrowing rates to 6 percent, though that leaves them way above near-zero rates in major developed nations.

The country's fiscal deficit is also projected to stand at a healthy 2 percent this year and 2.2 percent in 2013, well below an OECD average of 4.6 percent for 2013.

For now, the fast-tracking of infrastructure spending by Beijing and higher public housing investment is putting a floor beneath China's economic growth, the group said, without giving any policy recommendations.

Chinese demand for housing is also starting to improve again, it said, and banks have started lowering mortgage rates for first-time buyers, further boosting sentiment.

This, combined with rising wages, supported retail sales in the first nine months of the year, the OECD said.

"For the first time in about a decade, consumption is set to contribute more to growth this year than capital formation."