The Asian Development Bank has released an annual report, predicting China's economy will expand by 7 percent this year.
Director of ADB China Robert Wihtol said the prediction looks good because China's economic measures are taking effect.
"We consider the launching of the fiscal stimulus package as timely and appropriate. The economy is reacting positively to the stimulus, and this impact is enhanced by abundant liquidity and active banking lending. These positive trends suggested that the economic slowdown will be contained in the second half of the year."
The report also says China is facing deflation pressures due to falling prices in international markets. But over the year's period, commodity prices will rise by up to a percent.
The ADB report also suggests that China take bigger steps towards a consumption-driven economy.