China's economy rebounded towards 8 percent growth in the final quarter of 2012 after seven straight quarters of slowdown, data on Friday should confirm, but an uncertain global outlook means Beijing may need to keep tweaking policy to support growth.
A steady fourth quarter recovery has been heralded by an acceleration in industrial output in October and November and a jump in export in December, although some analysts believe last month's sharp expansion in trade could be a blip.
Full-year economic growth in 2012 is expected to have slowed to 7.7 percent -- the weakest expansion since 1999 -- from 9.3 percent in 2011.
"Recovery in the fourth-quarter could still be modest, we haven't seen any signs of a strong rebound," said Haibin Zhu, China economist at JPMorgan Chase in Hong Kong.
"The external demand remains uncertain and China's export sector still faces difficulties in the first half - the rise in December exports could be short-lived."
China's exports grew 14.1 percent last month compared with a year earlier, racing past market expectations of 4 percent and November's 2.9 percent pace.
Annual economic growth may have quickened to 7.8 percent in the fourth quarter from 7.4 percent in the third, according to a Reuters poll of economists, driven by faster infrastructure investment and a heating up of the housing market.
Analysts say that the recovery is still tepid.
Chinese leaders, while warning that the global economic malaise may last longer than expected, have promised to maintain policy "fine-tuning", Beijing's mantra throughout last year, in 2013 to keep growth stable.
Economic stability is seen vital for Xi Jinping and Li Keqiang, who are due to take over as President and Premier, respectively, in March, as they have pledged to push forward structural reforms to sustain long-term growth.
GDP and activity data -- industrial output, retail sales and fixed-asset investment -- will be released by the National Bureau of Statistics at 10 a.m. (0200 GMT) on Friday.
The central bank, which cut interest rates twice in mid-2012 and cut banks reserve ratios (RRR) three times since late 2011, has since switched to short-term cash injections via open market operations to guide monetary policy, apparently fearful of fanning price pressures or encouraging a property bubble.
While the central bank may be wary of cutting interest rates and bank reserve ratios again after data showing consumer inflation in December quickened to a seven-month high of 2.5 percent, it could still keep the credit tab open.
China's social financing, a broad measure of liquidity in the economy that includes corporate bonds and trust loans, jumped an annual 23 percent to a record 15.8 trillion yuan in 2012, while new loans rose 10 percent to 8.2 trillion yuan.
Chinese leaders have studiously avoided any hint of repeating the 4 trillion yuan ($640 billion) stimulus package it unleashed in response to the 2008/09 crisis, which led to a debt-fuelled spending binge by local governments.
Yao Wei, China economist at Societe Generale in Hong Kong, expects economic growth to quicken to 8.2 percent in the first quarter of 2013, but she cautioned investors to be wary of a policy backlash if property inflation rises sharply.
New home prices in 70 major Chinese cities rose 0.3 percent in November from October -- the fourth month in the last five to show a rise -- a modest increase but the most, nonetheless, in 19 months, official data showed.
Rising housing prices could be a fresh headache for China's policymakers as worries resurface about the sustainability of investment in the sector.
"The Chinese government will choose to tighten its property policies and check credit growth again if housing prices rise quickly," Yao wrote in a note to clients.
Several top government think-tanks have pencilled in annual economic growth of 8 percent growth for 2013, even though the government is likely to target 7.5 percent expansion.