Economic growth is likely to slow as institutional barriers such as a rigid household registration system and lack of human capital drag down GDP as China relies more on infrastructure development and consumption brought on by urbanization than manufacturing-based industrialization, according to a bluebook on China's GDP growth released by Chinese Academy of Social Sciences.

The government's target for GDP growth in 2015 is about 7 percent. GDP growth stood at 7 percent in the first half of this year. Most economic indicators such as PMI showed weak performance in the first two months of the third quarter.

The report pointed out that the next five years will be critical for China's economic transition to slower and steadier growth, and measures should be taken to deal with a reduction in labor supply, slowing investment and changing demand structures.

Improved total factor productivity is crucial to the Chinese economy's sustainable growth, especially in less developed central and western regions, the report noted, adding that better top-down reform design and fostering quality human capital will be key engines to power the transition.