China’s Industrial Growth Slows More Than Expected As Major Banks See Increase In Defaults

China’s manufacturing sector grew more slowly in October, the latest indication that the country’s economy is cooling. The official Purchasing Manager’s Index (PMI) reading for China released Friday was 50.8, down from 51.1 in September.

Any reading above 50 indicated growth, but economists had expected the figure to be slightly higher than the previous month’s. Analysts polled by Thomson Reuters had predicted a reading of 51.2.

The data came on the same day China’s industrial ministry warned that factories are facing higher borrowing costs amid a slower economy. August’s China PMI reading spurred Beijing to inject capital into the economy, which spurred growth in September, but October’s data show that effect was temporary.

The news comes in the same week China’s top lenders reported sluggish single-digit growth in their quarterly earnings reports, down from 20 percent growth seen in recent boom years. Industrial & Commercial Bank of China Ltd., the country’s biggest lender said Thursday its third-quarter earnings increased 8 percent compared to the year-ago period. China Construction Bank Corp. and Bank of Communications Co. reported 5 percent and 6 percent profit growth, respectively. All of the country’s major banks have reported increases in loan defaults