Hong Kong stocks closed higher on speculation China will ease policies to rejuvenate growth after official reports showed the economy slowed more than expected last quarter and manufacturing cooled last month amid a power crisis. The Hang Seng Index climbed 0.3 per cent to 25,409.75 at the close of Monday trading, reversing an earlier decline of as much as 0.8 per cent. The Shanghai Composite Index also trimmed losses to close little changed at 3,568.14. The Hang Seng Tech Index erased almost all the losses, aided by a 4.2 per cent jump in Baidu, Alibaba Group Holding, the owner of this newspaper, and Tencent Holdings both advanced by 0.7 per cent after trading lower for much of the day. China’s gross domestic product expanded 4.9 per cent from a year earlier, the statistics bureau said , trailing the consensus for a 5 per cent gain in a Bloomberg survey. The economy grew 7.9 per cent and 18.3 per cent in the preceding two quarters. Another report showed industrial production rose 3.1 per cent last month, versus a 3.8 per cent consensus estimate, reflecting the impact of an energy shortage in many provinces. “The worst time may have already passed,” said Alan Li, a portfolio manager at Atta Capital in Hong Kong, adding that the slowdown in China was widely anticipated. “The weak data can be viewed as [a catalyst] for the government or the central bank to ease policies in the fourth quarter.” Sportswear producers gained as mainland China’s retail sales beat market estimates in September. Sentiment remained upbeat as retailers prepare for a series of large-scale events, including the Double 11 shopping spree in November and year-end sales. Anta Sports advanced 4.4 per cent while Li Ning added 2.8 per cent. China’s data dump offers one of several tests to stock investors grappling with a myriad of concerns in the economy, including shrinking corporate earnings and a slowdown in property sales amid debt defaults by indebted developers. Investors will look at China Evergrande Group crisis as the 30-day grace period for two interest payments ends later this week. China’s central bank Governor Yi Gang said Sunday that China can contain the risks brought on by Evergrande, Bloomberg reported. The central bank on Friday said “the risk of spillover to the financial industry is controllable.” Analysts remained divided on how far China will go about easing its policies. Standard Chartered Bank predicts the central bank will cut banks’ reserve requirement ratio by half a percentage point before year-end to help ease a funding squeeze. “We are starting to see some tentative signs of policy inflection, but much more will need to be done to halt the tremors in the property sector and the broader slowdown,” said Mo Ji, chief China economist at Fidelity. “However, even significant policy easing now, which is still unlikely in our view, will take time to propagate into the real economy, leaving near-term risks skewed to the downside.” Three stocks began trading for the first time. In Shanghai, Beijing Fjr Optoelectronic Technology more than doubled to 46.11 yuan in Shanghai while Beijing Asiacom Information Technology jumped 65 per cent to 35.45 yuan in Shenzhen and Acrobiosystems rose 50 per cent to 168.82 yuan.