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With the global economy still facing serious challenges from the COVID-19 pandemic, China aims to achieve a higher than 6 percent GDP growth for 2021.
"By setting it at 6 percent, I think his [Premier Li’s] message is to all the governors, to everyone across China is go for qualitative growth; don't stretch yourself and go for quantity," said Joerg Wuttke, the president of the EU Chamber of Commerce in China.
According to him, China's GDP growth would easily exceed 8 percent this year.
Wuttke thinks the COVID-19 pandemic isn't really playing that much of a role in China any longer, and the main thing China needs to deal with in 2021 is external uncertainty. He added that in response to external factors, the Chinese government has been very smart to set a low GDP growth target.
Speaking of China's economic growth drivers this year, Wuttke said China has great potential in terms of consumer spending, as it currently has 400 million middle-income people, and its share of global consumption is still low. "China is clearly under consuming," he said.
He added that China has to make a real shift in investment. China already has the best infrastructure in the world and needs to give more room for investment in other areas to achieve consumption growth and social security in the future.
Regarding the investment areas where European investors have a strong interest in China, Wuttke said there is no doubt that the biggest lure for European investors right now comes from China's commitment to be carbon-free by 2060. The huge change from hydrocarbons to renewable energy in unprecedented numbers is where he sees future potential for business.
Wuttke noted that the renewable energy industry in China now employs 4 million people, while Europe, which used to lead in the renewable energy sector, now has 1.2 million people working in the industry, compared to 700,000 in the United States.
"I guess the leadership has realized that actually a very ambitious carbon-neutral target is a job-creation model," he said.
As for economic recovery, China is aiming for a stable deficit rate and isn't planning to implement strong stimulation. According to China's government work report, China plans to lower the deficit-to-GDP ratio to around 3.2 percent for 2021.
But there is significant stimulus with major economies, including the United States, injecting trillions of dollars into the market.
When it comes to the prospects for China-US relations, Wuttke argued that there has to be baby steps in rebuilding trust, and we cannot expect our leaders to sit in a situation where public opinion is really negative.
"For us Europeans, we don't want these two giants [China and the US] to fight," Wuttke said.
"China has huge GDP potential within China," Wuttke said, pointing to China's huge domestic market. He believes that breaking down barriers between regions within the country and opening up more to foreign companies to enter China will promote greater diversification of the Chinese market and significantly boost the growth of the Chinese economy.
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