Factory production rose 8.2 percent in October from 11.4 percent the previous month.

Analysts said this showed China's two economic growth engines - exports and the property market - need more intervention and underscored an urgent need to boost consumption.

The slowdown in industrial production was unexpected, economists said, especially after the good performance in September.

Premier Wen Jiabao agreed. He was quoted by the China Information News - the official paper of the National Bureau of Statistics - as saying: "The impact of the global financial crisis on China's economy is much worse than many had expected."

This is Wen's most pessimistic assessment since the economic meltdown began in the wake of the US subprime crisis.

China needs to focus on expanding domestic consumption through massive investment in infrastructure projects and bank lending, according to JPMorgan chief economist Frank Gong.

Gong said government spending and possibly treasury bonds and new loans from banks would be crucial to boosting domestic demand.

"From past experience, treasury bonds and new loans account for 70 percent of total spending. Money from savings could be used for private investment and spending," he added.

Gong estimated that 2.5 trillion yuan (HK$2.84 trillion) of the 4 trillion yuan stimulus package announced on Sunday would be new money.

The rest of the package comes from an unspent 1.5 trillion yuan allocated to infrastructure projects under the current five-year plan.

According to the statistics bureau, key product categories either registered single-digit growth last month or declined.

Vehicle production fell 0.7 percent to 730,000 in October and crude steel production declined 17 percent from a year earlier, while slowing industrial production was reflected in exports as they increased by only 6.8 percent year on year.

This pointed to weaker demand from major trading partners including the United States and Europe, which are experiencing an economic slowdown.

In the first 10 months, industrial output increased by 14.4 percent on an annual basis, the bureau said.