Stocks subdued as Chinese growth falls to weakest since '90

Stocks subdued as Chinese growth falls to weakest since '90

Expert predicts that China's GDP will grow at 6.4 percent in 2019, higher than the IMF's estimate of 6.2 percent, as the world's second-largest economy is grappling with the challenges of a slower growth and damaging trade war.

There were 15.23 million live births in 2018, a drop of two million from the year before, data from the National Bureau of Statistics (NBS) showed.

Capital Economics estimates slower China expansion will shave about 0.2 percentage point off global growth this year, compared to 2018, while Citigroup Inc. warned in a January 14 note that the China slowdown may "blow the global economy off course".

China is responsible for around a third of the global economy, and slowing economic growth in China, in essence, means slowing economic growth around the world.

Some economists and investors have said China's economy is far more anemic than the government's 6.6% rate of expansion for 2018. In theory, China has wide latitude to boost domestic demand to offset the trade war hit on external demand.

In December a year ago, the US and China agreed to a 90-day halt in their trade war to allow negotiations on a host of trade issues.

Economic activity held up through most of 2018 despite President Donald Trump's tariff hikes on Chinese imports in a fight over Beijing's technology ambitions.

The retail sales breakdown also went some way to counter fears of a slump in consumer confidence, showing that the decline in auto sales far outpaces any weakening in other items.

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A surprising rally for China's yuan over the turn of the year has been cut short by widespread expectations that Beijing will ramp up policy easing in coming months to avert a sharper economic slowdown.

After China implemented the comprehensive two-child policy that allows all couples to have two children - abandoning its decades-long one-child policy - in 2016, the country's health authority predicted that the fertility rate in 2017 and 2018 would be 1.97 and 2.09.

"I must say that trade and economic disagreements do have an impact on the functioning of the economy, but this influence is generally under control", Ning said at a briefing, during which the country's economic results for 2018 were announced.

China's more than US$13 trillion economy will likely stabilise in the second half of 2019 without the need for aggressive stimulus, according to Goldman Sachs Group Inc chief economist Jan Hatzius. Other Chinese analysts were more dower. "It was a awful year, and it doesn't look like things are getting any better this year", Lu told reporters. Auto sales in the world's biggest vehicle market shrank for the first time in 2018 since the 1990s.

"The most important driver really has been the credit deceleration and the concerns about financial imbalances on the part of the policy makers that has led them to pursue stricter policies", he said.

A cooling Chinese economy could hurt companies from iPhone maker Apple in the United States and carmakers in Europe to mineral exporters in Australia.

"The main reason is that we believe the target of doubling GDP in 2020 versus 2010 will still be met", said Mann.

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