If that's the case, then you're just trying to limit the "upstream" traffic from the host x.x.x.3 to anything outside the Internet. Do you also want to limit the "downstream" traffic from anything outside the Internet into the host x.x.x.3?
I would suggest that for "upstream" traffic, you use GTS on the s0/0 interface since "GTS shapes traffic by reducing outbound traffic flow to avoid congestion by constraining traffic to a particular bit rate using the token bucket mechanism."
For "downstream" traffic, you use inbound rate-limiting on the s0/0 interface.
so now the commands should look like this:
!define upstream traffic in ACL198
access-list 198 permit ip host x.x.x.3 any
!
!define downstream traffic in ACL199
access-list 199 permit ip any host x.x.x.3
!
interface s0/0
traffic-shape group 198 64000 8000 8000
rate-limit input access-group 199 64000 8000 8000 conform-action transmit exceed-action drop
!
Actually there're newer commands for both rate-limit and GTS which is modular and class-based. But I think you can try this first.