China will likely exceed its GDP growth target of 6% for 2021 as it moves more forcefully into high quality development, believes the largest European business association in China.
Jörg Wuttke, president of the European Union Chamber of Commerce in China, or the European Chamber, said China's GDP growth might easily exceed 8% this year with the government's emphasis on quality over quantity.
"By setting it at 6%, I think his (Premier Li Keqiang'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 Wuttke.
Wuttke isn't alone in predicting higher Chinese economic growth. The World Economic Outlook from the International Monetary Fund (IMF) released in January forecast an 8% expansion for China's economy this year.
During the ongoing 13th National People's Congress, Li said China will devote its full energy to promoting high-quality development, reform and innovation.
"In 2021, China will continue to face many development risks and challenges, but the economic fundamentals that will sustain long-term growth remain unchanged," said Li.
Wuttke said China's consumer spending, the major growth driver, will have even more potential this year as the country's share of global consumption remains low despite more than 400 million middle income individuals.
"China is clearly under consuming," said Wuttke.
He believes China won't rely heavily on massive economic stimulus packages to move the recovery forward. China seems to be aiming for a stable deficit rate, said Wuttke. This prediction is line with China's plans to lower the deficit-to-GDP ratio to around 3.2% this year.
China, however, has to initiate a massive shift in investments towards renewable energy to boost growth. Wutkke believes needs to make more investments in areas other than infrastructure to achieve consumption growth and social security in the future.
He revealed investment areas where European investors have a strong interest is suuporting China's commitment to be carbon-free by 2060. The unprecedented shift away from hydrocarbons to renewable energy is a massive business opportunity worth hundreds of billions of dollars.
Wuttke said China's renewable energy industry employs four million people, while Europe, which used to lead in renewable energy, now has 1.2 million people in the industry. The United States only has 700,000 workers in the renewable energy sector.
"I guess the leadership has realized that actually a very ambitious carbon-neutral target is a job-creation model," he said.
Based in Beijing, the non-profit, non-governmental European Chamber supports and represents the interests of companies from the European Union operating in China. Its main objective is advocating for a better business environment.