For next year, it tipped the mainland economy to grow 8.7 percent from an earlier estimate of 7.7 percent.

The average for the coming five years is 8 percent.

This is the second time this year that the World Bank has revised its forecast upward, saying Beijing's 4 trillion yuan (HK$4.54 trillion) stimulus plan and policies have proven to be successful.

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A rebound in exports and housing construction will further help China, the Washington-based institution said.

However, the bank warned more measures are needed to rebalance growth in China and cool down the red-hot stock and property markets. It also suggested that Beijing needs to stimulate domestic demand and not rely too much on investment and export.

Structural reforms to unleash more growth and competition in the service sector and stimulate more successful, permanent migration would be particularly welcome, the World Bank's Beijing-based senior economist Louis Kuijs said.

Meanwhile, International Monetary Fund managing director Dominique Strauss-Kahn said there is upside pressure for the yuan.

"We still believe the yuan is undervalued," Strauss-Kahn told Bloomberg TV.

"The exchange rate needs to appreciate in the coming years but I think that the process which is now at work is a process which goes in this direction."