Whether China can cross the middle-income trap depends on its economic sustainability. Although upgrading education is important, as a large country, China should take the advantage of cities, especially large cities, to enjoy human capital externalities, and the complementarities among workers with different skills. Thus, the returns to human capital can be enhanced, which is beneficial for both the country and the people. Aiming at these goals, the central government should increase basic education investment, make the resources for basic education portable across regions, and increase educational resources through various channels. At the same time, basic public services should be equally provided within cities for migrants, and the institutional barriers against migration should be gradually removed.