The outlook for China's economy has worsened, according to a BofA Merrill Lynch fund manager survey in October.

Just 5 percent of regional fund managers expected the Chinese economy to strengthen in the coming year, down from 28 percent in September.

And asset allocators further reduced their exposure to commodities – an important proxy for emerging market sentiment. Just over a quarter, 28 percent of asset allocators, are underweight in commodities, compared with 16 percent in September, the survey found.

China's GDP expanded 7.8 percent in the third quarter of this year, the National Bureau of Statistics said on Friday. The growth rate saw a moderate increase from 7.5 percent in the second quarter. But some analysts forecast that growth is plateauing, due to a weak export outlook and weaker-than-expected industrial activity.

Meanwhile, investor optimism over the global economic recovery and corporate profits has been dented as the tail risk associated with the US economy has escalated, though sentiment toward Europe has improved, the survey result said.

The survey taken from Oct 4 to Oct 10 showed that the number of investors believing the global economy will strengthen had fallen to 54 percent from 69 percent in September, albeit still at historically strong levels.

A clear majority, 71 percent, expect economic growth to remain "below trend" in the coming 12 months, up from 61 percent a month ago.