Li Yining, a renowned Chinese economist, said China’s economy is on an upward tendency, despite official data showing that China’s GDP dropped to below 7 percent for the first time since 1990.

Data from the National Bureau of Statistics showed on Jan 19 that China’s GDP grew 6.9 percent year-on-year in 2015, in line with the target of “around 7 percent” set by the government.

“There are no big problems with China’s economy. I think it is on an upward tendency, and it will get better this year than last,” Li, who is also the honorary dean of the Guanghua School of Management at Peking University, told the Beijing-based China Securities Journal.

He added that problems China has run into need to be solved through reforms, and reforms must go through a long process.

The economist explained that China’s economy maintained a high growth rate in the past because it was in a development stage of industrialization, but, at present, China is in transition from industrialization to post-industrialization.

He predicted that China’s economic growth rate will further drop from 7 percent to 6.5 percent, but it will be fine if China’s economy can maintain a growth rate of 5 to 6 percent for a long time in the future.

Although China’s old demographic dividends are being consumed, it will derive a “surprising” number of new ones from three types of sources, including entrepreneurs and innovators, vocational and technical school graduates, as well as the farmers ready to learn technologies and management skills, said Li.

He further suggested that the key to reforms on the supply side is to increase investment in weak industries. “Or else, China’s innovation strategy would be empty talk.”

To help innovators, he called for tax relief and other favorable policies for them.

To further push forward reforms of State-owned enterprises (SOEs); Li suggested conducting trials to establish a professional manager system in SOEs of competitive industries.

However, he stressed that, no matter recruiting senior executives from private entrepreneurs or from employees of SOEs, their administrative ranks must be abolished, which actually hinders selection of talented managers.