'Neutral' monetary stance urged for China

China should keep its monetary stance "neutral" amid the loosing in liquidity globally, and may strengthen capital controls if necessary, according to Justin Yifu Lin, the former vice-president and chief economist of the World Bank.

"It's important for China to adopt a relatively proactive fiscal policy while keeping a neutral monetary stance, which would be helpful to maintain rapid economic growth and keep prices relatively low," Lin told a news conference in Beijing on Thursday.

He said that if China sees a flood of short-term speculative capital inflows, it can bring in necessary capital-control measures to prevent dramatic appreciation of the yuan, and avoid bubbles in the real estate and equity markets.