China's rapid urbanization will greatly increase its number of middle-class people to 600 million and support an economic growth of between 7 and 8 percent annually by 2020, a government think tank chief predicted on Saturday.

Chi Fulin, executive president of the China Institute for Reform and Development, said at a forum in Haikou, capital of Hainan province, that domestic consumption will replace investment to become China's major engine driving the economy.

He said residential consumption in rural and urban areas is expected to jump to 30 trillion yuan in 2016 from 16 trillion yuan last year.