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.