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The development pattern, which relies on high input, high energy consumption and high capital accumulation, has produced grave negative effects -- environmental degradation, inequality of wealth and increasing tendency towards protectionism abroad.

The area has been infested with gang activities, but has been on a large part got rid of the crimes as the security beefed up and gentrification took its hold in recent years.

Eligible micro-finance companies could be transformed into rural banks, it said.

-- The seeking of luxury life style and pursuit for extravagance are pervasive in the modern Chinese society.

The economist said this relationship, mainly based on trade, offered many opportunities for further cooperation in cultural areas such as music. There is also a possibility, he said, for the two countries to work together on tackling climate change and other environmental issues.