The Organization for Economic Cooperation and Development (OECD) says China's economy, which has experienced a declining rate of growth for three years, is accelerating and will surpass the United States as the world's largest economy by 2016.

The Paris-based organization of 34 global economies says that China can average 8 percent growth during the current decade, after accounting for price differences. The forecast is contingent on Beijing's ability to continue implementing certain economic, financial and regulatory reforms.

“Those forecasts definitely look bullish, even a bit higher than average market expectations,”Win Thin, global head of emerging-markets strategy at Brown Brothers Harriman & Co. in New York, told Bloomberg News. “There is no major risk in the Chinese economy.”

China's growth slowed to 7.8 percent in 2012, marking its lowest level in more than a decade. However, the organization predicts that China's economy will rebound to 8.5 percent growth in this year and 8.9 percent the following year. That prediction is well ahead of Beijing's more conservative target of 7 percent average growth by 2015.

"This is the one country that always lowballs their growth" the OECD's Angel Gurria told the Financial Times.

The OECD's survey of China found that its middle class and wealthy segments are growing so fast that consumption has been a bigger driver of growth since 2011 than investment has.

However, the report also identifies major risks China faces as its economy balloons, including a weakened global economy, rising inflation, financial instability, income inequality, an aging population and restrictive policies controlling urbanization.

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