China's economy in 2018 grew at its weakest annual pace in almost three decades amidst a protracted trade war with the USA, putting pressure on Beijing to reach a deal with Washington and to amp up stimulus measures in efforts to avert a sharper slowdown.
China officially allowed every couple to have two children three years ago, however the figure for 2018 undercuts the reading of 17.86 million in 2016 and 17.23 million in 2017, according to data from the National Bureau of Statistics (NBS).
China's economic growth fell to a three-decade low in 2018 as business activity lagged amid a tariff war with Washington.
Analysts at Morgan Stanley said last week that they had turned bullish on the yuan, both because the People's Bank of China (PBOC) would refrain from intervening during trade talks and as companies convert more dollars into yuan ahead of Lunar New Year payments. China adjusted its economy and maintained medium-to-high-speed growth, showing resilience as the world's second largest economy.
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".
"With consumer confidence now trending down and the labor market set to weaken further, we think households will turn even more cautious in the coming months, weighing on service sector growth", Capital Economics wrote in a note on Tuesday after the data release. This was down from 6.8% in 2017.More news: Cousins attempted to debut a few weeks ago
Production of plastics, metals and specialized industrial machinery accelerated, "suggesting warming expectations for a pick-up in investment", Chaoping Zhu of J.P. Morgan Asset Management said in a report. "That announcement was highly anticipated by many around the world amid Beijing's ongoing trade dispute with the USA, its largest trading partner".
The talks will be held between Chinese Vice Premier Liu He and U.S. trade representative Robert Lighthizer to work an agreement before the March 1 deadline failing which President Donald Trump has threatened to slap additional tariffs on all Chinese exports to the US. But exports contracted more sharply than forecast in December as the penalties began to depress demand.
The trade dispute, and reports of job losses and tumbling sales of autos and real estate, have unnerved Chinese consumers that Beijing is counting on to drive growth.
"Things are going very well with China and with trade", he told reporters at the White House. Several economists are sceptical about China's official growth numbers, saying the actual rate is usually 30-40 basis points (100bps = 1 percentage point) lower than what is reported by official agencies, more so at a time of declining performance. However, they have pushed back the time frame for that due to weakening exports.
"We believe Beijing will further ramp up its stimulus measures, although it now seems reluctant to ease tightening measure in the property sector, leaving nearly the entire onus on infrastructure investment".