China's new plan to develop city clusters along the middle reaches of the Yangtze River will create a new economic growth engine by promoting urbanization and help address the imbalanced regional development across China, analysts said.

The State Council, China's cabinet, unveiled the plan on Sunday to develop three urban clusters that span Central China's Hubei, Hunan and Jiangxi provinces.

The urban cluster around Wuhan in Hubei Province, the Changsha-Zhuzhou-Xiangtan city group in Hunan Province and the cluster around Poyang Lake in Jiangxi Province will cover a total of 317,000 square kilometers and aims to become a pillar of the Yangtze River Economic Belt.

"Between 13 million to 15 million people from rural areas will be urbanized under the new plan. The hordes of people moving into cities are expected to fuel domestic demand and drive a more vibrant economy," Qin Zunwen, an economist and vice director of Hubei Academy of Social Sciences (HASS), told the Global Times on Monday. Qin brought up the idea of urban agglomeration along the middle reaches of the Yangtze River as early as 2003, and was one of the first scholars who proposed the scheme to the Chinese central government.

Qin expects the new plan to stimulate the growth of the regional economy at a rate faster than the national average, adding that the urban clusters will be the fourth economic pole in China after the Beijing-Tianjin-Hebei region, the Yangtze River delta economic zone near Shanghai and Pearl River Delta economic zone in Guangdong.

Wuhan's GDP growth reached 9.7 percent in 2014. In March, China lowered its growth target for 2015 to around 7.0 percent.

The plan was the first urban agglomeration initiative after the State Council released the National New-Type Urbanization Plan (2014-2020) in March last year, which set a target of 60 percent of China's population living in cities by 2020, up from 53.7 percent in 2014.

China has made urbanization a national priority to induce an economic upgrade and to make investment-driven growth more sustainable.

The initiative also helps to address the problem of an imbalanced development between regional economies as well as social and wealth discrepancies between urban and rural areas, a result of former leader Deng Xiaoping's two-step strategy to first develop coastal areas to be followed by inland regions, analysts said.

According to a statement released by the State Council on Sunday, the plan is part of the "Rise of Central China" strategy, a policy put forward in 2004 amid efforts to achieve a more balanced development.

China last year began creating an economic belt along the Yangtze to promote better coordination in industrial development and a more efficient allocation of resources among provincial regions along the Yangtze, China's longest river.

In a statement released on Sunday, the State Council said the plan will deepen the reform and opening-up and promote "a new type of urbanization."

Central China's Hunan, Hubei and Jiangxi provinces stand out as China's main rice production area, which is crucial to the country's food security.

The provinces also hold abundant water resources with Poyang Lake, China's largest freshwater lake, located in Jiangxi Province.

"It has become very clear to us that the development [of these urban clusters] cannot follow the old 'treatment-after-pollution' model of the city agglomerations in the coastal area," Peng Zhimin, another research fellow from the HASS and co-author of The Development Report on the Yangtze Middle Reaches Metropolis (2013-2014), told the Global Times.

"Simply put, economic development must not override the demand for environmental protection, which carries significant strategic importance not only to the region but also to China," he said.

Hubei Province is home to the Three Gorges Dam, the largest hydropower station in the world that provides power to nearly the entire Central China area. Danjiangkou, a small city in Hubei, is one of the starting points of China's South-to-North Water Diversion Project, which will supply water to more than 400 million people in North and East China.

According to the State Council statement, priority will be given to coordinated development between urban and rural areas and infrastructure connectivity, such as water conservation, energy projects and construction of vital transportation.

Efforts will be made to make the most of each area's comparative industrial advantages, build competitive industry clusters, strengthen modern agriculture bases, promote industrial transfer among different areas, and speed up industrial upgrades, said the statement.