Fitch Ratings said in its report "China's New Normal" on Friday that it expects the economy in China to grow in the second half of the year. But the agency added that the growth potential in the medium term is lower.

"Pessimism over China's short-term outlook is overdone and a growth pick-up in the second half is already in the pipeline," Fitch said.

The Chinese economy could expand about 5% on average over 2016-2020, according to Fitch.

"Fitch also expects more volatility around the new normal of slower growth, both in real economic activity and in financial markets," the agency said.