China's economy grew at its slowest pace in nearly 30 years over 2018, official data from the National Bureau of Statistics confirmed Monday, as a damaging trade war with the United States, and efforts to curb domestic pollution and reckless lending, took a major bite out of the world's second largest economy.
Domestic GDP grew 6.4% from October to December, the NBS said, taking total growth for 2018 to 6.6 % - the lowest rate since 1990 following the Tiananmen Square massacre and notably lower than that 6.8% rate recorded over 2017.
"As expected, China's economy slowed last quarter but conditions appear to have improved somewhat in December," wrote Julian Evans-Pritchard, senior China economist at Capital Economics in the hours after the GDP data was released. The "latest data suggest that economic growth remained weak at the end of 2018 but held up better than many feared, in part thanks to a policy-driven recovery in infrastructure spending."
"Still, with the headwinds from cooling global growth and the lagged impact of slower credit growth set to intensify in the coming months, China's economy is likely to weaken further before growth stabilises in the second half of the year on the back of expanded policy stimulus," wrote Evans-Pritchard.
While the 6.4% rate for the quarter was not a surprise, the rate was a decline from the previous quarters. Last week the government also reportedly lowered its targets for this year, too, to 6% to 6.5%, according to Chinese press. That news follows the uncertainty over the weekend of whether the U.S. is nearing a trade agreement with Beijing.
Chinese Vice Premier Liu He is reportedly set to arrive in the U.S. later this month to further discuss a trade deal with the U.S. as the March deadline looms for the 25% tariff rate threatened by President Donald Trump on $200 billion worth of Chinese imports.