Analysts said the August CPI statistics have triggered fears of further tightening measures, but it was the accumulated pressures rather than a single factor that had triggered the deep plunge, including rising PPI, issuance of 200 billion yuan in special treasury bonds, and the listing efforts of some big companies such as China Construction Bank and Bank of Beijing. In addition, the central bank also announced a week before, for the seventh time in less a year, that it will raise the reserve requirement ratio by another 0.5 percentage points for commercial banks to 12.5 percent starting on September 25, in a bid to "control excessive bank lending."

Fastest Property Price Increase

Statistics from the NDRC and the NBS show that property prices in China's 70 large and medium-sized cities rose 8.2 percent year on year in August, the fastest monthly increase this year.

The growth rate was 0.7 percentage points higher than that of July.

In August, prices for newly built residential houses rose 9 percent from a year earlier, up from 8.1 percent in July, and 1.5 percent over the pervious month, compared with 1.3 percent in July.

Beihai, a small city at the southern end of South China's Guangxi Zhuang Autonomous Region, posted the fastest year-on-year price growth of 18.2 percent for new houses among the cities. It was followed by Shenzhen, where prices rose 17.6 percent, and Urumqi, 15.5 percent, Beijing, 13.5 percent and Bengbu of Anhui Province, 11.1 percent.

Prices of second-hand houses rose 7.9 percent year on year in August, up from 7.3 percent in July. Shenzhen posted a 22-percent rise year on year, the fastest among the 70 cities. It was followed by Beijing, with 10.6 percent, Zhengzhou, 10 percent, Mudanjiang of Heilongjiang Province, 9.5 percent, Ningbo of Zhejiang Province, 9.3 percent, and Urumqi, 9.2 percent.

Stable Policy Applauded

China will slow down its development pace to make a trade policy readjustment which comes in the wake of complaints by exporting companies.

The Ministry of Finance will reduce the frequency with which it releases new policies to further adjust the export tax rebate so as to maintain a stable policy framework on foreign trade, according to a Shanghai Securities News report, an information platform of government decisions.

Since the beginning of this year, a number of packages of policies, such as the integration of income tax rates for domestic and foreign-funded enterprises, strengthening macro-management of the property market, and new policies on tariff rebate and processing trade, have been launched to curb Chinese trade surplus with its major trading partners and to encourage Chinese enterprises to improve competitiveness.

In particular, tax rebates for more than 2,800 export items were either eliminated or reduced on July 1, impacting many export-oriented processing enterprises in economic development zones, driving many small enterprises into filing for bankruptcy.

The frequent export tax rebate adjustments went against a stable policy framework, leaving little room for national policies to change in the future, said the newspaper citing an anonymous source.

Trade Surplus Growing

The Chinese Government's effort to curb exports has paid off to some extent, with the August export growth rate of 22.7 percent from a year earlier down 11.5 percentage points from July's growth rate of 34.2 percent.

However, in spite of the slowing exports, the trade surplus in August-$24.97 billion-remained the second highest in history after the figure of $26.91 billion in June, according to the General Administration of Customs.

Imports reached $86.38 billion, up 20.1 percent from a year earlier.

Experts say it is hard to predict whether the slowing trend will continue. "I believe we need to see the trade figures in the coming months to judge whether existing policies are really working to rein in exports," said Li Yushi, Deputy Director of the Chinese Academy of International Trade and Economic Cooperation under Ministry of Commerce.

The latest customs figures on exports do not mean the total amount of exported products is increasing because prices per unit of exported goods are rising, according to Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Cooperation. Mei cited figures showing the export price of products including cotton and motorcycles had increased this year. Meanwhile, exports will not slow dramatically as the worldwide demand for Chinese goods remains high.