BEIJING - China's economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to the lowest in nearly three decades and pressuring Beijing to roll out more stimulus to avert a sharper slowdown.
Growing signs of weakness in China -- which has generated nearly a third of global growth in recent years -- are fueling anxiety about risks to the world economy and are weighing on profits for firms ranging from Apple to big carmakers.
Policymakers have pledged more support this year to reduce the risk of massive job losses, but have ruled out a "flood" of stimulus like that which Beijing has relied on in the past, which quickly juiced growth rates but left a mountain of debt.
"The government has means to support the economy. They can expand infrastructure spending and they can cut banks' reserve requirement ratio. So we don't need to worry about capital spending," said Naoto Saito, chief researcher at Daiwa Institute of Research in Tokyo.
"But the problem lies in consumption. As the U.S. and China clash on many fronts, consumer sentiment appears to have been hurt. Until now, solid wage growth has been supporting consumption but now there appears to be a sense of vague anxiety about the future."
Fourth-quarter gross domestic product (GDP) grew at the slowest pace since the global financial crisis, easing to 6.4 percent on-year as expected from 6.5 percent in the third quarter, the National Bureau of Statistics said on Monday.
Though retail sales growth picked up marginally in December to 8.2 percent, the consumer strength gauge is around the weakest in 15 years. Auto sales in the world's biggest car market shrank for the first time since the 1990s.
Some factories in Guangdong - China's export hub - have shut earlier than usual ahead of the long Lunar New Year holiday as new business dries up.
Demand is weakening globally, not just in the United States. Net exports actually dragged on China's growth by 8.6 percent last year, Reuters calculations based on official data showed.
White House officials have given markedly different views on progress so far. China's Vice Premier and lead negotiator Liu He is due to visit Washington for the next round of talks at the end of the month.