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China has a 'solid base' for future growth

By Zhang Chunyan | China Daily Europe | Updated: 2015-01-25 15:10

Many European business leaders and analysts say they are confident that China's economy will continue to seamlessly develop in 2015.

Though China's economic growth underwent a slowdown in 2014 - growing at a rate of 7.4 percent, just shy of the central government's target of 7.5 percent - experts do not think China is going to experience an economic hard landing.

"China will not have these high levels of growth as it used to. I think it will be about the same as last year. This new shift away from previous models is taking effect, so I would not expect anything to change," says Jan Knoerich, lecturer on the Chinese economy at King's College in London.

Kurt Haerri, president of the Swiss-Chinese Chamber of Commerce, says China "has a very robust economic transformation plan and it will execute it seamlessly. This was the solid foundation the economic development has been built on during the last 30 years and it will be a solid base for progress in the future."

Michal Krol, a research associate at the European Centre For International Political Economy, says he's also confident in the Chinese economic outlook.

"China is going to implement its reform agenda. I predict a decrease in economic growth rate, where quantity is substituted for quality, stability and employment."

Stephen Phillips, chief executive at the China-Britain Business Council, sees encouraging signs "to indicate that things are heading in the right direction".

Many experts also agree that there are more business opportunities in China than in previous years.

Nicolas Musy, managing director of the nonprofit organization Swiss Center Shanghai, says Swiss companies in China have recently experienced a faster expansion in business.

"The reason is that 7 percent growth today is more added GDP than 11 percent growth in 2008, so business opportunities for growth are actually bigger now than five years ago," Musy explains.

"It is important and an opportunity for the rest of the world that China succeeds in its transition to having a much bigger part of its GDP based on domestic and private consumption rather than on government-based investment."

As the powerhouse of the global economy, China is the focus of the World Economic Forum's current annual meeting in Davos, Switzerland.

"I think the world, or a big part of it, has not come to terms with the fact that China's economy is unlikely to grow as fast as it used to. The recalibration process of the Chinese economy will take time. It's a balancing act that needs very careful maneuvering," says Kamel Mellahi, professor of strategic management at Warwick Business School in Britain.

Analysts also note that there are risks: the glut of property as well as environmental and healthcare challenges.

Mellahi says the environmental challenge is "an urgent problem with no easy answers, and unfortunately there are no short-term solutions that are both desirable and feasible".

"The challenge needs a careful, long-term strategy and of divesting away from highly polluting industries, coupled with heavy investment in new and cleaner sources of energy."

Philip Koch, deputy director of the international department at Hamburg Chamber of Commerce, believes China's government is working hard to tweak its economic models, as evidenced by Premier Li Keqiang's speech at the sixth Hamburg Summit in October.

"He called on the European business community to partner with China in this process. Europe can provide valuable technology and know-how, in particular in the process of 'greening' the Chinese economy, that could create a win-win situation for both sides," Koch says.

Knoerich says China can make these environmental problems and social problems an opportunity.

"I think focusing efforts on environmental technologies is a very good way forward. These are one of the challenges that China faces. It can be a leading producer and leading innovator in the future if it focuses on the industry like that."

Zhang Qi contributed to this story.

zhangchunyan@chinadaily.com.cn

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