China's 2018 growth slows to 28-year low, more stimulus seen

Chinas economy grew at slowest pace in 28 years in 2018

The 6.6 per cent growth comes in above the official target of around 6.5 per cent and matches a forecast by analysts polled by AFP, but is down from the 6.8 per cent chalked up in 2017, according to the National Bureau of Statistics (NBS).

"But the problem lies in consumption".

The government's cut in individual taxes from October a year ago may have played a hand in lifting consumer spending slightly based in December but analysts at Capital Economics said such impact is not likely to be long lasting. It has ruled out any return to the kind of massive stimulus package, based on government spending and the expansion of credit, that followed the 2008-2009 crisis because of concerns over the debt levels in the Chinese economy.

Even yuan bulls concede its recent gains have been gravity-defying, with some China watchers saying the economy may be in the midst of a significant slowdown.

"As the number of fertile women is expected to continue to decline in the years to come amid a decreasing willingness to bear children, China will continue to see its birth number decline", Mr He said. Reuters reports that officials are poised to reveal that Chinese economic growth slowed to its lowest level in 28 years in 2018, in large part because of the trade war with America.

Other economic data released Monday were better than expected, but still indicated a subdued economy.

Warning about a more complicated and tough external environment this year, Ning said China had the foundation, condition, confidence and capability to keep economic growth within a reasonable range.

"China-US economic and trade frictions do indeed affect the economy, but the impact is generally controllable", said Ning.

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Vehicle sales, a key indicator for Chinese consumption, also dropped last year for the first time in nearly 30 years. The reason I say this is because when I visited China in 2015 and met with Chinese defence officials, they had told me that China was looking to take advantage of strategic opportunities that the global scenario affords.

Demand is weakening globally, not just in the United States.

Trade negotiators are facing an early March deadline and Washington has threatened to sharply hike tariffs if there are no substantial signs of agreement.

Top trade envoys from both countries are due to meet at the end of January. Much of it has gone into a construction boom of unprecedented proportions-by one estimate, from the start of 2012 until 2016, China used as much cement as the USA did in the entire 20th century.

Many Chinese media have predicted that the 2019 job market will be the "worst-ever employment season", according to the Global Times. Some are cutting back on spending, which might worsen the downturn.

Some analysts believe it could deliver 2 trillion yuan ($295.13 billion) worth of cuts in taxes and fees this year, and allow local governments to issue another 2 trillion yuan in special bonds largely used to fund key projects.

Still, some analysts do not expect the economy to bottom out convincingly until summer.

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