(Yicai Global) Sept. 26 -- The Asian Development Bank raised its two-year economic forecast for China on Sept. 26 on the back of strong domestic consumption, a rebound in exports and solid growth in the country's service sector.

The bank expects the Chinese economy to grow 6.7 percent this year, up from the 6.5-percent prediction it made in April, and raised its expectations for 2018 to 6.4 percent, up 0.2 percentage points.

China's economy remains tough and consolidates its role as a global growth engine, said Sawada Yasuko, chief economist at the development bank. Its supply-side reforms are progressing, but its ultimate success will depend on prudent market balancing and the role the government chooses to play, especially in the economic transformation to markets and services that China continuously carries out.

The Asian Development Bank's forecast for the next two years is now in line with that of the International Monetary Fund, which raised its expectations in for China in July.

The lender expects the yuan and fiscal government will remain unchanged in China this year, and that the exchange rate reform could include the expansion of its currency's trading range. However, the bank also highlighted risks, such as a lack of liquidity caused by regulatory tightening, global trade protectionism and a return of capital outflow, which could come about if the dollar rallies.