A RAFT of economic data over coming weeks is expected to show the world’s second-biggest economy cooled slightly in March from the first two months of the year, with the main risk to the outlook now centered on an escalating Sino-U.S. trade spat.

Analysts fear a full-blown Sino-U.S. trade spat could have damaging economic consequences, hitting exporters of both nations and shattering global growth.

China’s export growth is expected to have weakened to 10 percent last month from February’s 44.5 percent, according to a Reuters poll of 31 economists, while China’s import engine may have revved up in a sign of improved domestic demand.

Analysts attributed the expected pullback in March exports to a seasonal downward adjustment after January-February numbers blew past expectations as firms stepped up shipments before the Lunar New Year holiday in mid-February.

A strong yuan could have also weighed on exports. The Chinese yuan gained around 3.7 percent against the U.S. dollar in the first quarter this year.

Still, there is potential for March exports to surprise on the upside.

“Overall, foreign demand remained strong in the first quarter,” said Lu Zhengwei, chief economist at Industrial Bank. “With a possible trade war with the U.S. looming, Chinese exporters may front load their overseas shipments before the U.S. tariffs kick in.”

Industrial output growth is likely to have slowed to 6.2 percent in March, even though authorities lifted winter pollution restrictions in March. As well, growth in fixed-asset investment likely eased to 7.6 percent last month.

However, domestic consumption is expected to remain solid, partly offsetting some of the drag from manufacturing. Retail sales are seen stepping up a touch with a 9.9-percent rise in March.

Broad inflation reading are expected slow and back views of broader slackening in economic growth.

Bank lending may have risen to 1.2 trillion yuan (US$190.56 billion) in March, after slumping in February, probably hit by a regulatory clampdown on riskier financial activity that has fueled a rapid build-up in debt. Banks extended a record 13.53 trillion yuan in new loans last year.

Foreign exchange reserves, meanwhile, likely rose last month as a stronger yuan and tight regulations discouraged capital outflows, after falling for the first time in 13 months in February.(SD-Agencies)