The country will also have to postpone its next manned space trip from 2007 to the second half of 2008 to give more time to test new equipment, said Huang Chunping, lead engineer behind the rocket that sent China's first man into space in 2003.
The 2008 mission was expected to include a spacewalk, and the ship would carry up to three people, Huang said, all of which makes the trip more technologically difficult.
"We're in no rush. We have to take it one step at a time," Huang told journalists on Sunday at the sidelines of the annual meeting of parliament, where he is a member of an advisory body.
China has come a long way since Mao Zedong lamented in 1957 - the year the Soviet Union put the first man-made object into orbit - that the country was incapable of putting even a potato into space.
China launched its first satellite in April 1970 aboard a Long March rocket, which orbited Earth blasting the Cultural Revolution anthem, "The East is Red". Since then, industry analysts estimate that it has launched more than 50 satellites.
"Our country can't invest all its money in space exploration, despite its importance. China is now, for example, paying particular attention to solving rural issues"
Huang Chunping, Chinese rocket engineer
In October 2005, China sent another spacecraft carrying two men into orbit for five days. An unmanned "round the moon" project, the first big step in China's lunar exploration plans, is expected to be launched next year.
The unmanned lunar orbiter is part of China's plan to eventually land astronauts - called taikonauts by the Chinese government after the Mandarin word for "space" - on the moon before 2020.
Huang said even that could be optimistic.
Fifteen years wait
"Putting a man on the moon - it will be impossible for at least the next 15 years," he said.
China is investing much of its
budget into ending rural poverty
As China was still a developing country with many problems, especially in its vast countryside where about 750 million people live, the space programme had to compete for resources, Huang said.
"Our country can't invest all its money in space exploration, despite its importance. It has to be viewed in a rational way," he said. "China is now, for example, paying particular attention to solving rural issues."
He said that it cost 19 billion yuan ($2.37 billion) to put a man into space, but pointed out that nearly 300 billion yuan would be spent this year on rural problems.
Huang said he understood why not as much money as he would like could be spent on space.
"The cities in China are like Europe, but the countryside is like Africa," he said. Huang said he was well aware how far China had to go to catch up. The former Soviet Union and the United States put their first men into space in 1961.
"Our technology has no problems, nor do our designs. But economically we can't do it. That's why we're so behind space powers like Russia and the United States," he said.