CHINA'S economic growth may rebound to 8.2 percent this year on an active fiscal policy, but its prospects may be dimmed by a sluggish global recovery, local government indebtedness and surging wages, the Asian Development Bank said yesterday.

The ADB said increased public spending in China will improve living standards and boost consumption.

"Following the rebound in economic activity since September 2012, growth (in China) is expected to continue picking up in the first half of 2013 and stabilize for the remainder of the year, as the impact of stimulus implemented in mid-2012 fades," the ADB said in a report.

It cautions that the Chinese economy this year will remain "vulnerable" and is subject to several downside risks including the weak global economy, volatile food prices in China due to the weather, possible rise in resource prices, and a surge in government debt for infrastructure construction.

Further, China's aging population and rising wages are also showing signs of eroding the competitiveness of the economy, threatening its growth potential, the report said.

The bank expects China's economic growth to slow to 8 percent in 2014 as the government makes greater efforts to comply with more stringent environmental targets as well as instituting reforms to ensure a more inclusive growth.

"The new leaders have indicated their intention to focus on quality, efficiency and the sustainability of economic growth, replacing the previous pursuit of fast-track growth," the report said. "In implementing its programs, the new government will be challenged by the risks and by the complexity of the reforms."

On Monday, President Xi Jinping said China will sustain "relatively high" economic growth but refrain from seeking growing speedily as the country needs to balance industrial development and green and sustainable development.