China's Economy Needs Major Overhaul: World Bank

China's export- and investment-driven economic model, though successful for decades, is no longer sustainable and reforms are needed to prevent a sudden slump on growth, World Bank President Robert Zoellick said Monday in Beijing.

The case for reform is compelling because China has now reached a turning point in its development path, Zoellick told a conference at which he presented a new report by the bank and China's State Council.

The country's current growth model is unsustainable. This is not the time just for muddling through -- it's time to get ahead of events and to adapt to major changes in the world and national economies, he added.

According to the report, China 2030: Building a Modern, Harmonious, and Creative High-Income Society, growth will slow to between 5 percent and 6 percent annually by 2030 and a major overhaul will be needed to sustain even that level. The report also stresses the need for reform in enterprises, land, labor and financial services as part of an effort to create a new framework for growth.

China's Premier Wen Jiabao will address the National People's Congress on March 5 and is expected to highlight the case for slower growth.

A reduction of real estate investment in China has been occurring faster than expected, curtailing economic growth. The country's annual inflation rate hit 4.5 percent in January, the highest level in three months, according to official data. December's inflation rate was 4.1 percent.