China ready to unleash growth potential

The Chinese economy will grow beyond 5 percent this year if the government adopts more proactive fiscal and monetary expansion to stimulate domestic investment and consumption, said Justin Yifu Lin, dean of Peking University's Institute of New Structural Economics.

In an exclusive interview with China Daily, Lin said that the nation's potential annual growth rate in the coming decade could be 8 percent or higher, rebutting theories that economic growth will continue to drop due to such factors as demographic changes and the so-called balance sheet recession, as experienced by Japan.

A balance sheet recession implies that households and enterprises have high levels of debt, resulting in sluggish consumption and investment, which in turn causes growth to either slow down or decline.