China's aim to eliminate poverty by 2020 is challenging but necessary as the country needs to progress as a whole, its top official in charge of the project said.

Rumblings of discontent over high levels of economic inequality after decades of uneven growth worry the ruling Communist Party.

President Xi Jinping has set the goal of building a xiao kang, or moderately prosperous, society free of poverty by 2021, when the party will mark its 100th anniversary.

China began a concerted campaign to fight poverty last year. Since then, 12.4 million people have been lifted out of poverty, including 2.4 million who were relocated from impoverished regions.

The Communist Party, which has called extreme poverty the country's "area of greatest weakness", plans to further reduce the number of destitute Chinese by 10 million this year, through relocating 3.4 million from remote areas, among other measures.

But Mr Liu Yongfu, who heads the Cabinet's Leading Group Office for Poverty Alleviation and Development, admitted yesterday that much of the low-hanging fruit had already been plucked last year.

At a press conference on the sidelines of China's annual legislative session, he said meeting this year's target will be an enormous undertaking as the majority of the remaining poor live in the most under-developed parts of China.

"In many of these less developed areas, those with culture, capability and skills have all left, leaving behind the old and infirm," he noted.

The fight against poverty, he said, is akin to "storming heavily fortified positions".

Among the key policies that have been announced so far is the household registration reform. This year, China will grant urban residency status to 13 million people who currently live in cities but hold rural household registration.

Last year, 16 million people were accorded the status.

Experts said opening up urban household registration - which gives migrants access to public services - will encourage urbanisation and lift wages at a faster pace.

More attention will also be paid to raising living standards in autonomous prefectures like Gansu, where ethnic majorities live, and border regions like Yunnan.