China needs to further reform its income distribution system so that the ranks of medium income owners can expand to be the mainstream of its society, said a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the top advisory body.

"Medium income earners should make the majority of the Chinese society, while the rich and the poor people should make up a very small percentage," CPPCC member Liu Guangfu told Xinhua on Wednesday.

A society with such an olive-shape income distribution structure tends to be "stable, rational, orderly and practical", he said, adding that the expansion of the ranks of medium earners is crucial in building a harmonious socialist society in China.

There's presently no definite, official terminology of "middle class" in China, but some economists, nevertheless, suggest that those households with an annual income anywhere from 60,000 to 500,000 yuan (from 7,250 to 60,400 US dollars) should be categorized as medium income earners.

The proportion of this group is expected to increase to 45 percent in the year 2020 from the present five percent, according to statistics provided by the National Statistics Bureau.

Liu said the Chinese government should resort to the payment of income taxes to leverage high and low incomes, penalize those have illicit earning and subsequently expand the ranks of medium income earners. "This will ease social conflicts and narrow the wealth gap in the short-term; and on the long run, it will facilitate China's stability as well as its modernization drive," he added.