The decades-long decline of the household sector's share in national income reflects China's traditionally cheap-labor advantage, but if labor shortages now lead to rapid wage growth, especially in low-income groups, household consumption should boom due to a greater propensity to spend among low-income households.

"Rising wages may also force companies to move up the value chain and boost total-factor productivity," said Sun. The government has pushed for this for years, but businesses had little incentive to do so while they could tap such a vast pool of cheap labor.

Upgraded industries, in turn, would better match the needs of better-educated workers, both in terms of jobs on offer and remuneration received.

A shortage of qualified talent and rising labor cost, in fact, is also a key challenge facing multinational companies operating in China.

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Mitch Barns, president of Nielsen Greater China, said acquiring, developing and retaining qualified labor is regarded as the main difficulty for companies' development in China in the next five years.

Andy Zhang, managing director of Cushman & Wakefield China, had a similar viewpoint.

"A lack of quality staff really poses a big challenge for us in expanding business here," Zhang said.

The world's largest reinsurance company, Swiss Re, for instance, just signed a deal with Peking University to jointly develop an insurance course, with the aim of developing a talent pool for its expansion in China.

"The most wanted talents in China's insurance sector are actuaries, and finding qualified actuaries is always a top priority for our human resources staff," said Robert Wiest, managing director, Clients Markets of Swiss Re Asia.