Chinese economic data on Tuesday, which include retail sales, industrial output and consumer prices for July, could give skittish financial markets a break from bad news if it shows the world's growth engine whirring along as expected.
But the figures are also likely to show inflation remained near a three-year high, putting the central bank in a tough position as Europe's festering debt crisis and the U.S. government debt downgrade darken the global outlook.
"Amid all this global concern about a weak recovery and financial market turmoil, China's data would show its economy is still holding up strong," said Tao Wang, an analyst at UBS.
But this time, data pointing to solid factory output, investment and retail sales would likely not argue for more monetary policy tightening.
After 10 months of steady tightening, analysts say grim growth outlooks in China's biggest export markets, the United States and Europe, should stay Beijing's policy hand.
Since October, China has raised interest rates five times and cash reserve requirements for banks nine times to combat quickening inflation, which hit a three-year high of 6.4 percent in June.
Up until Friday, many economists thought inflation-wary Beijing could raise rates once more this year to prevent rising prices from stirring social unrest.
However, a cut in the top-notch debt rating of the United States at the weekend by Standard & Poor's has markedly dimmed the world economic outlook. Many now fear higher U.S. borrowing costs could scupper any recovery in growth.
"Another rate hike can be pretty much excluded given the possible fall-out in external demand has increased," Ms. Wang said.
Underlining the shift in the balance of risks in China's policy from inflation to growth, Chinese interest rate swaps fell on Monday, with the five-year swap rate hitting a six-week low of 3.84 per cent.
Economists expect the data to show inflation rose 6.3 percent in the year to July, just a whisker under June's three-year high of 6.4 per cent. Pork and vegetable prices, the primary culprits behind June's hot inflation, rose less briskly in the second half of the month, which should offer some relief.
Industrial output, which accounts for 40 per cent of China's gross domestic product, is forecast to have grown 14.6 per cent in July from a year ago, slowing slightly from June's 15.1 per cent, as softer U.S. and European demand dragged.
But within China, activity is seen to be resilient.
Retail sales are forecast to hold steady at 17.6 per cent in July , compared to June's 17.7 per cent; fixed asset investment is seen little changed at 25.5 per cent, compared to June's 25.6 per cent.
At a time when global investors are on edge, a surprisingly strong performance from China's manufacturing, retail sales and investment could give sold-off risky assets a knee-jerk bounce.
Investors might take comfort in the fact that China, the world's second-largest economy, is growing fast enough to pick up some of the slack in demand. Conversely, unexpectedly weak readings would stir worries that even China's economy is slowing more sharply than forecast, possibly because it had over-tightened policy in previous months.
While that would fuel speculation that Beijing may ease monetary policy, analysts think that is unlikely for now.
Before Friday, when the U.S. debt downgrade shook global investors, analysts had argued that China's solid economy backed the case for more rate rises with inflation running high.
To be sure, some economists believe food prices are still a wild card. In July, for instance, some think other food prices may have jumped even as meat and vegetable prices eased.
But others argue that a slowing world economy will weigh on oil prices, which will ease inflation, and Beijing would risk sacrificing too much growth if it tightens policy further.
"China is likely to become more cautious in terms of its tightening policies," said Kevin Lai, an economist at Daiwa.
"For example, a potential rate hike that we highlighted last week could be called off."