“China’s economy entered 2018 at full throttle, undeterred by policy bumps along the way,” said Frederic Neumann, co-head of Asian economics research at HSBC Holdings in Hong Kong. “Over the course of this year, growth is likely to cool, responding to policy tightening at home and trade uncertainty abroad. But the deceleration should prove marginal.”

Expansion of 6.8 per cent in the first quarter would match the pace of growth in the last three months of last year and be just a fraction off the 6.9 per cent recorded for 2017. People’s Bank of China governor Yi Gang last week said economic indicators performed better than expected in the first quarter, amid continued improvement in the global outlook.

Retail sales are projected to have increased 9.7 per cent in March, matching readings in the first two months, while industrial production rose 6.4 per cent, a slowdown from January and February, according to economist estimates. Fixed-asset investment is seen slowing to 7.7 per cent in the first quarter compared to 9.2 per cent a year earlier. China combines some indicators for the first two months of the year due to an annual holiday.

“We really shouldn’t be surprised that China’s economy is doing well,” said James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology in Sydney. “Consumer confidence has been bouncing off multi-year highs, while purchasing managers indexes have been consistently in expansion territory. Like the US, it’s becoming more driven by domestic demand every year.”

Headwinds were likely to strengthen in coming months as property and infrastructure activity weakened though manufacturing investment, resilient consumption and strong external demand would cushion the impact, UBS Group economists Zhang Ning and Wang Tao said in a note.

Zhou Hao, an economist at Commerzbank in Singapore, said growth would be pressured by campaigns to curb financial risk and pollution, factors that made economic policy overall less favourable to growth. And as most Chinese cities had seen a property slowdown since late 2017, the sector would remain a drag on growth in coming quarters, he said.

Looming large over everything is the risk that trade tensions with the US morph into a protracted, widening conflict. Friction has escalated as Trump threatened tariffs on some US$150 billion of imports from China and Beijing announced potential retaliation on US goods including soybeans and airliners.

Hopes the dispute can be quickly settled were boosted last week when Xi reiterated pledges to open sectors from banking to car manufacturing in a speech at the Boao Forum for Asia. He also expanded on proposals to increase imports, lower foreign-ownership limits on manufacturing and expand intellectual property rights.

“We hope both China and the US can solve the disputes with wisdom and respect,” Huang Songping, a spokesman for the customs administration, said in Beijing on Friday. “We hope trade relations can return to the track of healthy and stable development.”

A week after escalating tensions by threatening tariffs on an additional US$100 billion of Chinese products, Trump said on Thursday that the two countries might end up levying no new tariffs on each other.

“Now we’re really negotiating and I think they’re going to treat us really fairly,” he told Republican leaders from farm states at a White House meeting. “I think they want to.”