Official statistics show that China's urbanization rate, indicated by the ratio of urban residents to the total population, had risen to 52.57 percent by the end of 2012 from 51 percent in 2011. However, that is still much lower than the average of 80 percent in fully developed economies.

Wang Guoping, director of the Hangzhou International Urbanology Research Center, said urbanization will create huge domestic demand and boost economic growth.

"The transformation of the growth pattern should be related to the development of the urban regions.