China had more city dwellers than rural residents last year for the first time in history, data showed, a demographic milestone that also points to strains in labour supply in the world's No. 2 economy.
As many as 51.27 percent of 1.347 billion mainland Chinese lived in towns and cities at the end of 2011, China's National Bureau of Statistics said.
Globally, about 51 percent of the world's 7 billion population live in cities, the United Nations says.
In contrast, 30 percent of residents in India, the world's second-most populous nation after China, live in cities while 82 percent of Americans are urbanites.
Rapid urbanisation in China over the past three decades has underpinned its stellar economic performance as hundreds of millions of people leave rural homes for towns and cities in search of better-paying jobs.
In 2011 alone, China's rural population fell 14.6 million, or the size of Cambodia, data showed.
But the rate of urbanisation is slowing and dragging on labour supply, even though the massive shift of people from countrysides into cities is far from over and will keep driving China's economy in years to come.
A rapidly ageing Chinese population adds further strains. The number of Chinese over 65 is nearly the size of Japan's entire population at 122.9 million.
Ma Jiantang, the head of the statistics agency, said falling labour supply was key in underpinning Beijing's target for 7 percent economic growth between 2011 and 2015.
Analysts agree China's labour supply is dwindling, but there is debate about whether the country is near or crossing the Lewis turning point, a theory that wages in a developing nation start surging once there is a shortage in surplus rural labour.
Average Chinese salaries are already rising, albeit from low levels. Per capita urban disposable income rose 14 percent to 21,810 yuan (2,275.39 pound) in 2011 from a year ago, while per capita rural income was 6,977 yuan.
Analysts say average salaries understate China's income gap, but that is hard to verify as China does not publish a nation-wide Gini Coefficient, a widely-used measure for wealth divides.
Ma said Beijing could not compile the coefficient because we can't obtain the true income data of China's high-income urban residents.
The Gini index for rural China stood at 0.4 at the end of 2011, suggesting a middle-of-the-road income divide with 1 being most severe and 0 indicating equal distribution of wealth.
China's economy grew 9.2 percent last year, slowing from its 10.4 percent expansion in 2010.
(Reporting by Zhou Xin; Editing by Nick)