The World Bank on Wednesday upwardly revised its projection for China's economic growth in 2013 from 8.1 percent to 8.4 percent, but predicted the rate would taper off in the longer run.
This year, growth in the world's second-largest economy is expected to reach 7.9 percent, slightly better than the previously projected 7.7 percent, the Washington-based body said in its East Asia and Pacific Economic Update.
"Weak exports and the government's efforts to cool down the overheating housing sector slowed down China's economy in 2012, but recovery has set in the final months of the year," the World Bank said.
"In 2013, China's economy is expected to grow at 8.4 percent, fuelled by fiscal stimulus and the faster implementation of large investment projects."
Still, despite the revision, 2013's rebound is not expected to take China's growth back to its 2011 level, when it reached 9.3 percent.
"In the longer run, GDP growth is projected to moderate somewhat because of the structural shift of the economy, which is anticipated to move away from investment and export-driven growth," the bank said.
"The anticipated slow recovery of the global economy, ebbing effects of this round of domestic stimulus, and the aging population contribute to this forecast."
Fiscal measures such as targeted tax cuts and social welfare spending "should attract first priority," the bank said, noting that Beijing's near-term policy challenge was balancing the trade-off between supporting growth and reform.