CNN Beijing chief: China's challenges, opportunities (3)

"China needs to shift its economic model from being the factory of the world to the innovator of the world. So it needs more development in the service sector, and that could be the next growth area for China," he said.

A report by the Ministry of Agriculture said in the first three quarters of this year, the urban-rural income ratio has narrowed to 2.72 to 1, down from 2.77 to 1 in the same period last year, and the gap has been on the decline for three consecutive years.

But the overall wealth gap in China has given rise to social conflicts in recent years, and FlorCruz sees it as a major obstacle for China's economic reform.

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