China’s economic growth will exceed its target in 2021, Vice-Premier Liu He has said, despite multiple headwinds that threaten to derail recovery from the coronavirus pandemic. “We’re abundantly confident about China’s economy next year,” Liu said on Tuesday during the Hamburg Summit, a virtual event focused on relations between China and Europe. Liu, the top economic adviser to President Xi Jinping, said the economy has continued to recover this year, with employment, commodity prices and international payments “normal overall”, and growth “expected to exceed target”. China set a gross domestic product growth target of “above 6 per cent” for 2021, after the economy rebounded to 2.3 per cent for 2020 from a historic first quarter contraction of 6.8 per cent due to widespread lockdowns to contain the spread of Covid-19. China was the only major economy in the world to expand last year as the pandemic ravaged business around the globe. Looking ahead, the vice-premier said China would cultivate a better environment for small and medium-sized enterprises and foreign companies. It would also expand market access for overseas firms and promote fair competition, while accelerating the development of Xi’s “dual circulation” strategy , which aims to tap China’s huge domestic market. “China’s geographic conditions and natural resources determined the opening up of the economy,” Liu said. Chinese graduates return to find Western degrees no longer an ‘advantage’ “We have realised in the past 40 years that China must insist on reform and opening up.” The country’s GDP increased 4.9 per cent in the third quarter from a year earlier, down from a 7.9 per cent expansion in the second quarter. Despite the upbeat tone by senior officials, analysts are concerned about the resilience of China’s recovery, which has been challenged by sporadic coronavirus outbreaks, the worst power shortage in decades, and crackdowns on property, technology and private tutoring. Yubin Fu, Moody’s vice-president and senior analyst, said in a report on Wednesday that economic recovery remains unstable and uneven. “The economies of most Chinese provinces slowed in the third quarter of 2021,” he said. “The pace of recovery will come under pressure while headline growth will be marginally lower in the fourth quarter.” China’s official Manufacturing purchasing managers’ index (PMI) rose to 50.1 in November , the first uptick after seven months of decline and the first positive growth after two months of contraction, data from the National Bureau of Statistics showed on Tuesday. But the Caixin/Markit PMI, which gauges sentiment among private and smaller businesses, showed on Wednesday that China’s factory activity fell back to contraction in November . Liu also called for more contact and discussion to mend wounded ties between China and the European Union , and urged for economic and trade cooperation to ensure supply chain security. “As two major economies and the two driving forces of the world economic recovery, China and Europe should continue to strengthen economic and trade cooperation in the post-pandemic era, jointly promote transition to low-carbon economies, deepen trade and investment cooperation, and jointly preserve the security and clearance of the global supply chain,” Liu said.