China's factory sector grew in October but at a pace that was slightly slower than expected, underlining the challenges facing the sector as manufacturers fight rising costs and softening demand in a cooling economy.

The official Purchasing Managers' Index (PMI) eased to 50.8 in October from September's 51.1, but above the 50-point level that separates growth from contraction on a monthly basis.

Analysts polled by Reuters had forecast a reading of 51.2.

The data followed warnings by China's industrial ministry on Friday that factories were under pressure from high borrowing costs, which were further exacerbating the sector's slowdown.