Mass rural unemployment, simmering ethnic tensions in Xinjiang and Tibet, a greying society and the fallout from decades of environmental neglect are only a few of the issues facing the People's Republic founded in 1949 by Mao Zedong.
"The gap between rich and poor is seriously widening, so they need to redistribute income to allow people to think it is fair," he told AFP.
"They need to fight corruption, which is institutionalised, and they know they need to advance 'democracy'."
Joseph Cheng, a China expert at the City University of Hong Kong, explained that many of the country's deep-rooted societal problems -- especially joblessness -- stem from its sheer size.
"China's population of 1.3 billion people is a huge burden for the Communist Party," Cheng said.
"There are between 120 million to 200 million unemployed people in the rural sector that want to move to the cities -- this poses a complicated long-term problem and a huge potential for instability."
Tens of thousands of "mass incidents" take place in China every year -- a worrying sign of mounting social discontent.
The government is scrambling to set up a social security and health care network that can cover the entire nation, with experts predicting that nearly a quarter of the population will be aged 65 and over by the year 2050.
But Cheng said China's vast problems have made further economic growth the sole likely answer to lingering dilemmas such as unemployment, the rich-poor divide and environmental degradation.
President Hu Jintao -- under pressure to unveil plans to clean up China's notoriously smoggy skies -- last week pledged to reduce the economy's carbon intensity by a "notable margin" and invest heavily in renewable energy.
But Cheng said it was still unclear if vigorous spending on so-called "green" technology can help China address toxic air pollution and wean itself off its dependency on coal, the main driver of the world's third largest economy.
Beyond the economic sphere, China has for years stressed the dangers of the "three forces" -- extremism, separatism and terrorism -- which it says are alive and well in two minority regions, Tibet and Xinjiang.
The party now sees the situation of ethnic minorities as a "burning issue", according to Jean-Philippe Beja, an expert at the French Centre for the Study of Modern China in Hong Kong.
Deadly anti-Chinese riots broke out in Tibet last year, while ethnic unrest erupted in the Xinjiang capital Urumqi in July, leaving nearly 200 dead and more than 1,600 injured.
"The 'East Turkestan' forces pose a severe threat to the development and stability of Xinjiang," the cabinet said in a recent policy paper, referring to Muslim separatists whom Beijing accuses of trying to create an independent homeland.
"Terrorist activities organised by the 'East Turkestan' forces aimed against various ethnic groups in Xinjiang pose an open challenge to... China and are serious crimes of violence against society."
The paper echoed similar government views regarding the riots in Lhasa and other Tibetan regions ahead of the 2008 Beijing Olympics, which the government said were incited by separatist forces linked to the exiled Dalai Lama.
Amid such an array of major challenges, the biggest fear for most ordinary Chinese is a faltering economy and stagnating living standards.
"As long as I can make money and improve my life, then I am satisfied with the government," said Zhou Lian, 44, a manager at a home decoration store.
"When I was growing up, my family had no money to eat meat. Nowadays I can eat meat every day, and I can buy all the clothes I want.
"I have already bought the biggest home I have ever lived in and if I want I could buy a car."
