Improved October data reinforced the view that China's growth stabilization is on track, Barclays said in a research note on Monday.

"We continue to expect a moderate recovery rather than a sharp near-term rebound," said Huang Yiping, an economist with Barclays.

Infrastructure investment has more than offset slowing manufacturing investment, and retail sales growth has continued to improve.

The downside surprise to food inflation was due to falling vegetable prices, Barclays said, but key items in non-food inflation have edged higher, while PPI deflation has bottomed.

The October activity figures released on Friday confirmed the positive signs from the PMI data, suggesting that the encouraging broad-based improvement seen in September will continue in the fourth quarter, the research note said.