The Asian Development Bank (ADB) has upgraded its forecast for China's economic growth this year to 10.1 percent from its previous prediction of 9.6 percent.

Growth in China is beginning to ease, but signs show the economy is shifting toward more sustainable growth from its earlier torrid pace, said the bank in a recent report.

"Rapid export growth is expected to slow, consistent with the weaker external environment. Fixed-asset investment is also moderating with measures to cool the property sector expected to continue to restrain real estate investment," said the ADB report. "Still, private consumption, proxied by retail sales, remains strong."

China's faster-than-expected expansion will help emerging East Asia grow 8.8 percent this year, up from an original estimate of 8.4 percent, said ADB.

"With the V-shaped recovery in hand, many emerging East Asian economies now face the challenge of managing strong growth and capital flows," said Iwan Azis, head of ADB's regional economic integration office. "Continued robust growth in many emerging East Asia economies suggests authorities are on track in normalizing macroeconomic policy."

Mitigating the negative effects of surging capital flows will require an appropriate mix of sound macroeconomic management, flexible exchange rates, resilient financial systems, and—in some cases—temporary and targeted capital control, he said.