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Survey shows China manufacturing industry expanded at modest pace in Oct even as output lags

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BEIJING — A gauge of the health of China's manufacturing industry inched higher in October but factory output was at a five-month low in a sign of slowing domestic and foreign demand.

HSBC said Thursday the preliminary version of an index based on a survey of factory purchasing managers rose to 50.4 from 50.2 in September. Figures above 50 on the 100-point scale indicate expansion.

HSBC's chief China economist Hongbin Qu said manufacturing likely stabilized in October but the world's No. 2 economy continues to show signs of "insufficient" demand.

"This warrants further policy easing and we expect more easing measures on both the monetary as well as fiscal fronts in the months ahead."

Earlier this week, China reported economic growth fell to a five-year low of 7.3 percent in the third quarter as the government tries to nurture domestic consumption while expansion based on trade and industrial investment runs out of steam.

Growth in the previous quarter was 7.5 percent, helped by mini-stimulus measures.

The preliminary index is based on responses from 85-90 percent of the factories surveyed.

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