The current priority needs to be adhering to austerity measures and continuing to let air out of the bubble, he said.

On August 6, the China Banking Regulatory Commission reiterated its stance to tighten mortgage loans to third-home purchases. It also asked lenders to conduct stress tests for a worst-case scenario where house prices may plunge 50-60 percent in some cities.

Fixed-asset investment

The fixed-asset investment in the first seven months increased 24.9 percent from a year earlier to 11.99 trillion yuan ($1.77 trillion), according to the NBS. The investment in real estate development from January to July surged 37.2 percent to 2.39 trillion yuan ($351.5 billion).

Retail sales

NBS data also showed that the retail sales of consumer goods rose 17.9 percent year on year in July to 1.23 trillion yuan ($180.8 billion), 0.4 percentage points lower than in June.

Bank lending

Newly added bank loans denominated in renminbi fell to 532.8 billion yuan ($78.6 billion) in July from 603.4 billion yuan ($88.9 billion) in June, said the People's Bank of China, the central bank.

The July figure brought new loans for the first seven months to more than 5.16 trillion yuan ($761 billion), accounting for 68.8 percent of the government-set target of 7.5 trillion yuan ($1.1 trillion) for this year.

Meanwhile, the broad money supply (M2), which covers cash in circulation and all deposits, increased 17.6 percent to 67.41 trillion yuan ($9.9 trillion) by the end of July.

Grain Crisis

Global grain prices are skyrocketing, mounting heavy pressure on the Chinese market.

Russia, the world's third largest wheat producer, on August 5 ordered a ban on grain exports after a severe drought devastated crops and as wildfires spread across the country. This triggered panic in commodities markets, sending wheat prices to a two-year record high.

European wheat prices peaked at 236 euros ($307.2) a ton on the news while U.S. wheat futures also jumped 8 percent on August 5 on top of an 80-percent increase since mid-June. Panic buying spilled across the grain markets into corn and soybeans, which soared as well.

Given the magnitude of the price spike, fears are proliferating that the pressure will ripple into China through trade links.

China has no serious shortages of grain this year, but the impact of the international price surges will still be felt due to a growing reliance on imports, said Ma Wenfeng, a senior analyst at the Beijing-based Orient Agribusiness Consultant Ltd.

In the first half of this year, China's wheat imports more than doubled to 845,000 tons from one year ago while rice imports surged 44.3 percent, said the Ministry of Agriculture. In the past few years, China has relied on imports for less than 10 percent of its wheat consumptions.

Meanwhile, rainstorms across the country have added to the risks of price inflation by hampering summer planting, he said.

Clues of domestic price hikes are not difficult to find. Some grain dealers are rushing to snap up stocks while farmers hesitate to sell, expecting price increases.

It is necessary for the government to stabilize the market and step up a clampdown on price speculation, said Ma.

Investment in Ningxia

The Ningxia-Beijing Economic and Trade Promotion Conference was held on August 6 in Beijing, delivering a strong boost to economic cooperation between the two regions.

The conference witnessed 11 deals worth 9.72 billion yuan ($1.43 billion), mostly for investment projects in new energy, tourism and new construction materials in northwest China's Ningxia Hui Autonomous Region.

Among the biggest projects, the government of Longyuan County, Ningxia, has teamed up with Beijing-based Longyuan Power Group to build a wind power project with an installed capacity of 300 megawatts.

"These ties with Beijing will help strengthen Ningxia's economic vitality. The green industries will also pave the way for the economy to grow," said Li Rui, Vice Chairman of Ningxia Hui Autonomous Region. n