Deutsche Bank raised China's third quarter GDP growth forecast to 7.9 percent from 7.7 percent, and that for the fourth quarter to 8 percent from 7.8 percent, according to a report from its Greater China Region chief economist released on Thursday.

Ma Jun said in the report that they also revised up 2014 GDP growth forecast by 0.1 percent to 8.6 percent.

The specific trigger for this upgrade is the August industrial production released on Tuesday that came in at 10.4 percent year-on-year, significantly higher than 9.7 percent in July and the market consensus of 9.9 percent.

The retail sales and fixed asset investment data also exceeded estimates, suggesting that inventory restocking is not the only reason for the ongoing recovery. End demand from consumers and investment activities are beginning to support the overall economy.

Global demand is in a recovery mode, which is likely to improve the export performance of China in the coming few months.

Because of the rise in business confidence on the slew of mini-stimulus measures, the velocity of money has increased and it would be positive for economic growth.

The government's fiscal revenue will likely improve as a result of the growth recovery and the rise in the producer price index. The faster growth of fiscal revenue will obviously translate into stronger capacity for local governments in investing in infrastructure.