China manufacturing: growth slows in October. Photo: China.org

Chinese manufacturing growth slowed in October, the government said Saturday, as the world’s second-largest economy expands at its weakest pace in five years.

China’s official purchasing managers index (PMI), a measure of activity in the sector, came in at 50.8 last month, the National Bureau of Statistics said.

The figure was lower than the 51.1 recorded in September and compared with the preliminary 50.4 figure in a private survey released by British bank HSBC on October 23.

PMI tracks activity in China’s factories and workshops and is a closely-watched indicator of the health of the economy.

Readings above 50 indicate growth, while anything below points to contraction.

HSBC is scheduled to release its final PMI reading for October on Monday.

ANZ Bank economists Liu Li-Gang and Zhou Hao said that the figure suggests China’s central bank will likely continue to utilise its so-called Standing Lending Facility, a tool used to manage short-term liquidity.

“The weaker-than-expected reading of official PMI suggests that the easing bias in the monetary policy will be maintained,” they said.

The Chinese economy expanded 7.3 percent in the third quarter, lower than the 7.5 percent expansion in the previous three months and the slowest since the depths of the 2008-2009 global financial crisis, the government announced last month.

Beijing’s 2014 growth target is about 7.5 percent, the same as last year, though officials including Premier Li Keqiang have openly stated a slightly slower increase is tolerable as long as the job market remains resilient.

Chinese authorities have since April used a series of limited measures to underpin growth, including targeted cuts in reserve requirements — the amount of funds banks must put aside — and a 500 billion yuan ($81.8 billion) injection into the country’s five biggest banks for re-lending.

A slowdown in China’s huge property sector is also weighing on overall growth, with economists worrying that a potential destructive bust in housing prices could dent economic hopes for the Asian powerhouse, a key driver of global and regional growth.