GROWTH in China's industrial output may slow to 11 percent this year from 15.7 percent in 2010, the Ministry of Industry and Information Technology said yesterday.

Higher production costs, tightening monetary policies and revamping the country's economic structure were cited for the expected moderation.

But China's manufacturing sector needs to grow in a stable way as this year marks the start of the 12th Five-Year Plan and economic growth relies on a sound expansion in output, said Xiao Chunquan, deputy director of the ministry's Performance Inspection and Coordination Bureau.

"A good sign is that global demand for manufactured goods has rebounded with a better economic outlook," Xiao said at a press conference in Beijing. "Chinese manufacturers are also beefing up efforts in technological innovation and quality improvement to upgrade their products."

China's industrial production surged 15.7 percent in 2010 from a year earlier, up 4.7 percentage points from 2009's. It contributed 49.3 percent to the nation's economic growth last year, 9.3 percentage points more than the previous year.

China's gross domestic product grew 10.3 percent annually in 2010, and manufacturing continued to be a driving power, Xiao said.

However, a survey has indicated a gloomy start for this year's manufacturing sector.

The HSBC Flash China Manufacturing Purchasing Managers' Index, an indicator to measure industrial activities across the country, fell to a seven-month low of 51.5 in February amid tightening measures and rising production costs.

China's central bank ordered banks to put aside more money as reserves last Friday, 10 days after an interest rate increase.

Manufacturers also saw higher output costs. China's Producer Price Index rose 6.6 percent from a year ago in January.