Housing prices in 70 large and medium-sized cities rose 10.3 percent year on year in July. It was the third consecutive month that the prices rose at a slower pace and the lowest rate in six months.

Signs are emerging realtors have been succumbing to the pressure. Yongshun Real Estate Development Co. Ltd., for instance, has cut prices at a residence project in east Beijing by 20 percent.

The government will adhere to the austerity measures in the housing sector, including striking hard against speculation and increasing supplies of affordable houses, said Vice Premier Li Keqiang, during a recent visit to Changzhou, east China's Jiangsu Province.

Modest Growth

China Mobile, the world's largest telecom operator by subscribers, reported modest growth in first-half profits despite cutthroat competition.

From January to June, the company raked in a profit of 57.64 billion yuan ($8.48 billion), up 4.2 percent from one year ago.

Revenues rose 7.9 percent to 229.82 billion yuan ($33.8 billion) as the company added almost 31.76 million new customers in the first half, bringing the total customer base to 554 million.

The telecom behemoth has been gradually losing ground to smaller rivals since late 2008 when China revamped the sector and allowed China Telecom into the wireless market. Meanwhile, a spending spree on the third-generation mobile networks is also believed to have weighed on its profitability.

"We are faced with daunting challenges—intensifying competition and an already high mobile penetration," said Wang Jianzhou, Chairman of the Board of China Mobile.

In December 2008, China Mobile signed up nine out of 10 new mobile users in the country. But the share dived to barely 60 percent in July 2010. Meanwhile, subscribers are paying less. The average revenue per user—a key barometer for long-term growth prospect—slipped to 72 yuan ($10.6) in the first half from 75 yuan ($11) a year earlier.

"But we still have confidence to grow amid the increasing momentum of the Chinese economy," said Wang. "We will continue to explore the rural and migrant worker market which is showing significant growth potential. Efforts will also be made to diversify into other value-added services, such as music downloading and mobile payment."

Overseas M&As

With deep pockets at their disposal, Chinese companies are looking for cheap bargains overseas.

Chinese outbound merger and acquisition (M&A) deals in the first half of this year hit a record of 99, up by more than 50 percent year on year, said the accounting firm PricewaterhouseCoopers (PwC), in a recent report.

Natural resources are the main target for Chinese investors overseas. Fourteen resource deals were announced from January to June, with the largest being Sinopec's $4.7 billion purchase of a 9-percent interest in Canadian largest oil sands producer Syncrude.

"Although natural resources continue to be the priority industry target for Chinese investors overseas, we are seeing other industries starting to get increased attention, including high technology, manufacturing and services industries," said Andrew Li, a Transaction Services Partner at PwC. "Meanwhile, investors are broadening their target regions to include the United States, Japan and the EU."

Hydropower Expansion

China aims to lift its installed hydropower capacity to 300 million kilowatts (kw) by 2015 from its current 200 million kw.

The expansion is a needed boon for the national drive to cut carbon emissions and forge ahead with the green economy, said Zhang Guobao, Director of the National Energy Administration (NEA).

China has relied on coal to power its economic growth engine, as about 83 percent of its electricity is produced by coal-fired power stations.

Efforts will be made to develop hydropower projects across the country under stricter approval procedures, which focus on protecting the environment, the rights of relocated immigrants and land resources, said Zhang.

Meanwhile, the NEA is studying the feasibility of a plan to raise the on-grid price for hydropower to the same rate as electricity produced by thermal power plants.

The proposal, if adopted, would benefit hydropower operators but would inflate costs for grid operators and consumers, he said.