CHINA'S manufacturing activity expanded at a faster pace in October, according to a survey by CLSA Asia Pacific Markets.

The Purchasing Managers' Index rose to 55.2, a 31-month high, from 55 in September, CLSA said yesterday according to Bloomberg. A reading above 50 indicates an expansion.

The fourth quarter "has started out even stronger than the third," Eric Fishwick, CLSA's deputy chief economist, said. "Production and new orders are at very elevated levels."

China's economic expansion, the fastest of any major economy, is at too high a cost to resources and the environment, the Chinese government admits. The central bank will raise interest rates before the end of the year to cool investment, curb inflation and deflate stock and property market bubbles, according to a Bloomberg News survey of economists.

Industrial production jumped 18.9 percent in September from a year earlier, the biggest increase in three months.

CLSA's index is based on replies to questionnaires sent to purchasing executives at more than 400 industrial companies. The survey tracks changes in output, new orders, employment, prices, inventories and delivery times. The data is seasonally adjusted.

The output index rose to 58.4 in October from 58.3 in September, while the index of new orders declined to 59 from 59.3. The index of export orders dropped to 52.7 from 52.9.

A government PMI survey, released by the China Federation of Logistics and Purchasing and the National Bureau of Statistics earlier yesterday, showed a lower reading. Its index dropped to 53.2 in October from 56.1 in September.

The indexes have different methodologies and routinely give opposing readings.