The World Bank today upgraded its 2009 economic growth forecast for China to 8.4 per cent on the back of huge public spending but warned stronger domestic demand was needed to ensure a sustainable recovery.
The new prediction given by the Washington-based lender in its quarterly update marked a sharp jump from its June forecast for 7.2 per cent growth.
Economic growth in the Asian giant would "rise somewhat" in 2010, it added.
"In spite of a large drag on growth from exports amidst the global recession, China's economy continues to grow robustly because of expansionary fiscal and monetary policies," the bank said in the report.
"Infrastructure investment has been key but consumption has also held up well. More recently, real estate activity has been recovering as well."
The upgrade by the World Bank follows similar moves by the International Monetary Fund and Asian Development Bank after the rapid turnaround in the world's third largest economy caught economists somewhat by surprise.
The World Bank said China was "on track" to reach Beijing's oft-stated goal of eight percent growth this year - seen as vital for job creation and warding off social unrest in the country of 1.3 billion people.
But it warned a "successful re-balancing" of the economy was needed to ensure a sustainable recovery in the medium term.