* Chinese, Indian PMIs climb higher despite global worries
* G20 deputy finance ministers convene call about Europe
* Australian growth slows, Japan warns of long deflation
By Langi Chiang and Anooja Debnath
BEIJING/BANGALORE, Dec 1 (Reuters) - Factories in China and India cranked production up a gear last month, offering a small boost to the global economy faced by a spreading debt crisis in the euro zone and sluggish recoveries in the United States and Japan.
But manufacturing surveys in both Asian giants also highlighted a worry that has clouded the outlook for investors: rising inflationary pressure and the need for more monetary tightening in fast-growing developing economies.
That could be a bitter pill to swallow with Europe teetering on the brink of more serious debt troubles. The euro stabilised on Wednesday after falling a day earlier on concern that member states may ultimately be forced to default. [ID:nL3E6N103A]
Deputy finance ministers from the Group of 20 economies discussed "the financial situation in Europe" on Monday Asia time in a teleconference arranged last week, a senior G20 source in Asia said. [ID:nL3E6N109X]
The manufacturing sector in Asia provided some solace from the gloomy prognosis in Europe.
Two purchasing managers' indexes in China registered their strongest readings in more than half a year and helped lift Asian shares outside Japan by 0.6 percent.
The story was similar in India, where the HSBC Markit PMI climbed to a six-month high.
While a rise in output and new orders drove the PMI gains in China, the biggest increases came in input prices. [ID:nTOE6B001C]
"Good news from the economy may not be that good for the market as it is concerned about more tightening," said Ting Lu, an economist with Bank of America-Merrill Lynch.
"The high PMI reading could convince Beijing to tighten a bit more on the margin."
ASIAN RESILIENCE?
The strong Indian PMI followed data on Tuesday that showed its economy grew by a blistering 8.9 percent in the September quarter from a year earlier.
That is likely to add pressure on the central bank to continue raising interest rates, though traders do not expect another hike until early next year. [ID:nBMA009007]
South Korea was another bright spot in Asia. Exports from the region's fourth-largest economy rose slightly more than expected in November from a year earlier, while a key index measuring its manufacturing-sector activity reversed a six-month falling streak. [ID:nTOE6AR01G]
But in Asia's leading developed economy, the picture was far less rosy.
Prolonged economic weakness may keep Japan in deflation longer than the Bank of Japan's current forecast, a member of its policy board said on Wednesday, offering the bleakest view to date by a central bank policymaker.
Board member Miyako Suda said there was a strong chance Japan's economy would contract in the final quarter of this year after strong growth in July-September. [ID:nTOE6B002F]
She also warned of lingering downside risks to the export-reliant economy, including market jitters over Europe's sovereign debt woes.
Australia also flashed a warning sign, with its economy growing at the slowest pace in almost two years last quarter, according to data published on Wednesday. [ID:nSGE6AT0FR]
G20 CALL
Efforts by European policymakers to reassure investors have so far come up short. Global officials are also focusing their attention on the problem, with the G20 deputy finance ministers holding a pre-arranged teleconference about it on Monday.
"It's a tradition of the G20 to share information whenever there's an important situation going on," the source, who took part in the call, told Reuters on Wednesday.
The source added that the participants reviewed the 85 billion euro ($110.7 billion) bailout package for Ireland announced at the weekend. They discussed what could be done on the part of the G20, but the source declined to elaborate.
The euro zone's debt crisis deepened on Tuesday when investors pushed the single currency lower and spreads on bonds of fiscally weak member states to new highs. [ID:nLDE6AT0Z0]
European policymakers came out in force to try to calm markets, with European Central Bank President Jean-Claude Trichet warning that pundits were underestimating the determination of governments to keep the euro zone stable.
But markets paid little attention, pressuring Portugal, Spain and Italy only days after the EU agreed to an 85 billion euro ($110.7 billion) bailout for Ireland.
Later in the day, Standard & Poor's warned it could cut Portugal's credit ratings within the next three months if the country' growth prospects weaken further or if private creditors become subordinated to public creditors in a possible financial aid program.| (Editing by Ken Wills and Tomasz Janowski)