China needs to pay high attention to fend off financial risks while promoting urbanization, according to a senior official with the United Nations.

Joan Clos, undersecretary-general of the United Nations, made the remark on Friday while at a panel discussion alongside the international forum on sustainable urban development, and said "China needs to find out sustainable financing plans to support long-term development while promoting urbanization."

"Mass urban sprawl inevitably involves real estate construction and land sales," he said.

"That may accumulate financial risks at the time when China has an overheated housing market."

Clos added the good news was that the central government also elevated the importance of fending off financial risks.

He said he suggested risk management should be added when evaluating the achievement of promoting urbanization of local governments.

The percentage of the population living in urban areas was at 57 percent by the end of 2016, and had a target rate of 60 percent by 2020, according to the 13th five-year plan（2016-20）.