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STOCKS in the banking and real estate sectors dragged the Shanghai Index down today amid concern that the government will make further moves to curb gains in home prices.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, was down 2.62 percent, or 131.15 points, to close at 4,876.76 at 3pm today. The index opened at 5,007.29 at 9:30am.

Gainers in the Shanghai market outnumbered losers 429 to 332 while 85 were unchanged.

The Shenzhen Composite Index, which covers the smaller mainland stock market, lost 0.94 percent, or 12.54 points, to 1,319.20. The Shenzhen index opened at 1,334.34 at 9:30am today.

Vanke, the nation’s biggest listed property developer, had its biggest decline in six months today after sliding 9.52 percent, or 2.85 yuan (39 US cents), to 27.10 yuan.

Lenders dropped on concern a slowdown in the property market will sap demand for housing loans.

Industrial & Commercial Bank of China Ltd, the nation’s biggest listed lender, fell 4.01 percent, or 0.32 yuan, to 7.67 yuan. China Merchants Bank Co, the nation’s biggest dual-currency credit-card issuer, lost 5.91 percent, or 2.28 yuan, to close at 36.31 yuan.

China is likely to levy a property tax on a trial basis next year, the Beijing News reported today, citing Feng Changchun, a Beijing University researcher who participated in drafting the proposed rules.

Taxes would start with commercial property such as office buildings, said the report. The levy would then be extended to owners of more than one residential property before it eventually covered all property owners, it said.

A property tax, which is assessed on real estate already owned as opposed to new purchases, can help curb speculation, the report said.

China has raised the key one-year lending rate to a nine-year high of 7.29 percent and clamped down on bank lending and tightened project approvals.

The central bank last week told commercial banks to tighten rules for mortgage loans to help curb rising home prices. Property prices increased 10.5 percent in November, the fastest pace since 2005.

China needs to control inflation with tighter monetary policies, Shanghai Securities News reported today, citing Wu Xiaoling, the People’s Bank of China’s deputy governor.

Sagging investment confidence also bruised industrial shares today.

China Petroleum & Chemical Corp, known as Sinopec, the nation’s largest oil refiner, slid 1.86 percent, or 0.41 yuan, to 21.63 yuan while PetroChina, the nation’s biggest oil company, lost 1.83 percent, or 0.56 yuan, to finish at 29.99 yuan.

Sinopec Shanghai Petrochemical Co, a unit of Sinopec, was suspended from trading today.

The company plans to offer 3.2 state-owned A shares for every 10 held by shareholders in the country. The company’s shareholders will meet on Janaury 15 to approve a proposal to convert state-owned stock to “circulating” shares, the refiner said in a statement to the Shanghai stock exchange today.

Consumer stocks shrugged off market doldrums today and performed strongly as investors bet they will weather the government’s measures to cool the economy.

Shenzhen-based Midea Electric surged the daily cap of 10 percent, or 3.29 yuan, to close at 36.20 yuan while Suning Appliance, China’s second-biggest home appliance retailer, advanced 5.72 percent, or 3.70 yuan, to 68.35 yuan.

CHINA should set up a system that will tie people’s income with the rise in the consumer price index, the State Information Center suggests in a report published yesterday.

The research unit under the National Development and Reform Commission also said that China should improve its innovative ability and reduce energy consumption to combat risks of a sudden slowdown in economic development. It also said that other measures to control more investments should also be considered.

“It is a challenge for China to contain growing inflation next year due to rising prices of foodstuff and farm produce in the global market. It should set up a system to connect people’s income and consumer prices to ease the pressure over people’s livelihood,” the report said.

In November, China’s consumer price index, the main gauge of inflation, climbed to an 11-year-high of 6.9 percent, pushing the cumulative rise in the first 11 months to 4.6 percent, up 3.3 percentage points from the same period last year.

The forecast for next year’s consumer prices was divided, with the central bank’s research bureau projecting 4.5 percent while Deutsche Bank predicted a 3.8-percent growth.

But both institutions forecast a retreat from this year’s surge following the imposition of tighter credit control policies.

“The economy will observe another year of accelerated growth but the pace will slow due to the government’s strong determination to cool economic development,” said the report.

“Also, China’s property market and stock market have seen risks accumulated from rapid advances (in prices). They might experience a relatively heavy correction next year, which poses a big challenge to the nation’s macroeconomic control.”

The subprime turmoil in the United States may spread from the finance sector to the wider economy at large, the report said. It might lead to a cut in China’s exports and leave domestic factories idle.

To cope with the challenges, China should boost innovation and cut energy use to sustain economic development.

Enthusiastic Beijingers have gathered in Tiananmen Square to mark the moment the countdown clock for the 2008 Olympics reached 200 days.

At six o’clock on Sunday evening, the countdown clock was started jointly by executive vice-president of BOCOG, Liu Jingmin, Olympic gold medalist Wang Yifu and representatives of local residents. Freezing temperatures did nothing to cool the residents’ passion. The Games will start on August 8th this year, lasting until the 24th.

A local resident said, “It’s 200 days away from the Olympic Games now. I plan to take photos of the countdown clock and Beijing from today until the opening ceremony, to show how excited Beijing residents are about the Olympics.”

My mom was stopped by a visitor one day on Zhongshan Road, the age-old commercial street and city center of Xiamen, Fujian province, who asked her where he could find a genuine local delicacy. After thinking for a while, she answered, “I don’t know.”

Well, I should say that is the worst answer that a native of Xiamen, in East China, can give. But my mother had her reasons to be vague.

“I didn’t know which one to start with,” my mom explained. “The other thing is he emphasized ‘the most genuine’ food, which you couldn’t find in decent restaurants, but mostly tiny places that are scattered in inconspicuous streets and alleys. They are seldom on the map. Visitors will easily get lost unless they have a local guide to tour around.”

She is right. I’ve heard a lot of people who have been there talking about my hometown - how they enjoy the pleasant climate and crystal clean sea, how enchanting Gulangyu Island is, how jealous they feel of local residents, and how they wish to spend their retirement there. Often, they will end such cliched talk with “and the seafood is yummy”.

I don’t think the seafood distinguishes Xiamen much from other coastal cities in the world. Only when you squeeze into those crowded snack eateries for a cup of peanut soup, or start the day with a casual sip of tieguanyin tea and a sweet stuffing cake, can you feel the soul of this small city of peace and leisure.

For me, the Spring Festival holiday not only means an evening banquet with relatives, but also a reunion with a lot of distinctive snacks and refreshments.

Yet during the vacation, I had the same problem as regular travelers. I stuffed too many fish, crabs and shrimps, leaving not much space for tasty street delicacies. Particularly, I missed one of my favorite snacks that I strongly recommend to future visitors in Xiamen.

It used to be a common scene that street peddlers carried two baskets on a shoulder pole and hawked tu sun dong. The three characters literally mean soil, bamboo shoot and jelly. Yet the word tu sun has nothing to do with either soil or bamboo shoot. In Xiamen dialect, it refers to a kind of sea worm.

People first soak a handful of such tu sun in water so that the worms spit out mud. Then they press the worms to get rid of the remaining mud, and cook them in boiling water for a few minutes. The final step is to pour the soup and worms into several bowls. The soup will become jelly after it cools down.

Such worm jelly is half crystal colored with white, bamboo-shoot-like worms visible. It may sounds scary but tastes great. And the authentic way to eat it is to dip it into the locally-made sweet pepper sauce, or a mixture of soy and wasabi sauce. If it’s summer, you are advised to cool it in the fridge first. The jelly will feel smooth when it fills your mouth, and the worms will be crisp.

Inflationary pressure and economic uncertainty further undermined consumer confidence in the first quarter of the year, a widely watched index showed Wednesday.

The National Bureau of Statistics said the consumer confidence index dropped 1.7 percentage points to 94.8 from the fourth quarter of last year, a signal consumers’ willingness to open their wallets is waning. In February, confidence slid to an 18-month low of 94.3 when inflation gained 8.7 percent, a 12-year record high.

An index measuring shoppers’ confidence in the economy also declined slightly to 90.8 from 92.5 in the fourth quarter of last year, when another index measuring consumers’ outlook for the next three months declined to 97.5 from 99.1.

Zhuang Jian, an economist with the Asian Development Bank said: “Concerns about inflation and uncertainty about the economy have cast a cloud over consumer confidence.

“The sluggish stock market also forced consumers to tighten their purse strings because of the depreciated financial investment.”

Consumer inflation has been on the rise since last year, largely due to soaring food prices. Mounting inflationary pressure then caused the government to adopt a slew of austerity measures to dampen investment and cool down the economy.

Combined with the turmoil in the international financial market, the move is now creating concerns the world’s fourth-largest economy might undergo a major slowdown this year.

The uncertain outlook has triggered a slide in the local stock market. Since the beginning of the year, the benchmark Shanghai Composite Index has shed about 40 percent, partly due to concerns about the profitability of listed companies in a weakened economy.

“The drop in consumer confidence is still moderate, and the potential consumption decline in the coming months is unlikely to have a substantial impact on the overall economy,” Zhuang said.

Currently, consumption accounts for less than 50 percent of China’s economic growth, compared to about 70 percent in the United States.

“Once inflationary pressures ease, consumer confidence may pick up again,” Zhuang said.

The China Iron and Steel Association (CISA) has denied rumors that there would be a rise in steel export taxes as soon as this weekend.

Some media reports, which speculated that export taxes on more than 80 types of steel might be raised by 5 to 10 percent as of June 1, had “disordered the industry’s normal production and exports,” the CISA said in a statement on its website.

“The rumor went against the stability of the economy and the ongoing quake-relief work,” said the CISA, which stressed that the stability of export policies was key to a steady steel market.

An official at CISA’s office declined to elaborate on the “disorder” when contacted by telephone by Xinhua.

However, the Shanghai Securities News reported that some exporters had delivered goods to bonded areas at coastal ports after hearing the rumors, to avoid anticipated higher costs.

China has been increasing steel export taxes and cutting rebates since 2005 as part of its efforts to curb smokestack industries and cool heated fixed-asset investment.

In the most recent move, the country raised the export tax rate on steel billets and ingots to 25 percent from 15 percent on Jan. 1.

A slowdown in Chinese steel exports has tightened global supplies and driven up world prices of steel, as well as those of raw materials for the steel industry such as coal, coke and iron ore.

Domestic prices were driven up in turn, according to the statement.

In the first four months of this year, China produced 169.8 million tons of crude steel, up 9.1 percent up year on year. But that growth rate was 12.1 percentage points lower than a year earlier, according to the National Bureau of Statistics.

The slower rate of increase, in turn, accounted for a decline of 3.5 percentage points in the growth of global steel production year on year, said the CISA.

During much of the same period when Chinese steel output was growing more slowly, world and domestic prices rose.

The CRU Steel Price Index, an indicator of world steel prices, surged 38.1 percent year on year to a record 221.9 points at the end of March, while China’s domestic steel price index soared 29.61 percent to 142.31 points, according to CISA deputy secretary-general Qi Xiangdong.

China’s steel industry should adopt a strategy of focusing on domestic demand and keeping an appropriate amount of exports, which would help rein in international steel and iron ore price hikes and abate domestic inflationary pressure, according to CISA.

China’s largest steel provider, Baoshan Iron and Steel Co., Ltd. (Baosteel), has informally told dealers it would raise prices of steel products in the third quarter.

The price of steel plate heat commercial (SPHC) would rise by 200 yuan (about 28 U.S. dollars) a ton from 5,142 yuan in May and that of 1.0 steel plate cold commercial (SPCC) would rise 300 yuan from 5,996 yuan.

The hikes were inevitable as global prices had been running at a higher level than domestic ones, said Mysteel Research Institute (MRI) analyst Xu Xiangchun.

He said Baosteel was adopting prudent price hikes, considering a sharp increase might further fuel inflationary pressure, burden steel-consuming enterprises and affect the post-quake reconstruction.

China exported 16.25 million tons of rolled steel and billets in the January-April period, 32.1 percent down from a year earlier, CISA figures show.

If the trend persisted, total 2008 exports could fall 29.42 percent year-on-year to 48.75 million tons, above the government-set annual target of reducing exports by 20 million tons, said the CISA.

MRI analyst Zeng Jiesheng forecast that exports would rebound in the coming months but added that the government was unlikely to change export taxes before the fourth quarter.

Previous policies had proven effective, while frequent changes could be disruptive to producers and lead to a rush in exports as companies sought to avoid higher taxes, said Zeng.

In the first four months of 2008, exports of Chinese rolled steel to the European Union (Bulgaria and Romania excluded) dropped 55.1 percent year on year to 1.51 million tons, while those to the United States fell 33.1 percent to 997,000 tons.

During the same period, China sold 1.79 million tons of rolled steel to Vietnam, 66 percent up year on year.

Shawn Johnson and Nastia Liukin, who battled each other in competition the past year as the leading US gymnasts, will join forces as Olympic teammates in Beijing.

The petite, powerful Johnson and the tall, elegant Liukin claimed the first two places of the US women’s gymnastics team by leading the US Olympic trials late last month.

“We’re such good friends, we’ve shared so many different experiences, the tough workouts,” world all-around champion Johnson said.

“Knowing that Nastia was named was very exciting for me. Having her being my biggest competitor, we work so well together. We push each other so hard to get to the next level and we’re such good friends.”

Liukin, 18, looked a little worn out by the second day of the trials, making uncharacteristic mistakes on the uneven bars - one of her best events - as the grind of the recent US championships coupled with the trials seemed to take a toll.

“I’m glad to get that out of the way here,” Liukin said. “Hopefully toward the end of the summer it will be perfect.”

Liukin and Johnson, 16, shared a teary-eyed hug after their selection.

“It’s been a long process for everybody,” said Liukin, who has overcome a series of injuries while still collecting a US record-tying nine medals from three world championships.

Johnson overcame the hardship of Iowa’s recent severe flooding that damaged her gym in Des Moines. She had to shift some of her training ahead of the trials while her family and members of the community pitched in to repair the facility.

The paths taken by the two gymnasts, like their styles, are in marked contrast. Liukin is the daughter of gymnastics royalty, whose father and coach Valeri won two gold and two silver in gymnastics for the Soviet Union at the 1988 Olympics and whose mother was a Soviet world champion in rhythmic gymnastics. Johnson came to the attention of USA Gymnastics after her Chinese coach Qiao Liang sent a videotape of her to team coordinator Martha Karolyi.

Liukin said following in her father’s footsteps had not been a burden. “I’ve never felt the pressure to follow him, it’s just been really cool to have him as an Olympian and to be able to look up to somebody and try to achieve what he did.

“So I’ve always felt like it’s been more of an opportunity than pressure.”

While many holidaymakers use their vacation to kick back and relax, busy Britney Spears has spent her time out learning different skills.

After tangoing by the pool at her resort in Cabo San Lucas, Mexico earlier this week, Britney stepped up the action by going for a scenic horse-ride along the beach.

Looking slimmer than she has in years, Britney looked fit and healthy as she showed off her tanned legs in denim cut-off shorts and a lemon vest.

As the resort rose to a sizzling 99 degrees, Britney kept her cool riding in the sea breeze on the long strip of golden sand.

After settling her length custody battle with ex-husband Kevin Federline two weeks ago, Britney flew to the Central American resort with a group of friends, including Las Vegas casino owner George Maloof.

On Monday, a cheerful Britney performed the sensual Argentine dance with a mystery male companion by her hotel pool as a blonde pal filmed the fun.

The star is making the most of her free time after officially agreeing to give her ex husband Kevin Federline sole custody of the couple’s two sons, Sean Preston, two, and Jayden, one.

She is currently allowed two visits and one overnight per week in the settlement.

The singer is also focusing on making another album this year after a mixed response to her last effort Blackout.

Her reinstated manager Larry Rudolph announced this month: ‘Britney is spending her summer in the recording studio, working on a brand new album.

‘She’s working with a team of top-notch producers and songwriters, and we’re very excited about what she’s accomplished so far. No album release date has been confirmed yet.’

The country’s economy has maintained steady and rapid growth in the first half but faces increasing uncertainty for the rest of the year, a senior government official said Wednesday.

“Negative impact on the economy will continue,” said Zhu Zhixin, vice-minister of the National Development and Reform Commission (NDRC), China’s top economic planner, in a press conference.

The economy expanded 10.4 percent year-on-year in the first half, NDRC figures showed. The growth rate was 1.8 percentage points lower than the same period a year ago, as the government reportedly put in place a series of measures to cool the economy and weakening overseas demand dealt a blow to the export sector.

More than 7.56 million jobs were created in the first seven months, in line with government measures to create 10 million vacancies this year, the NDRC reported.

Still, Zhu said curbing price hikes in the second half of the year will be a difficult task. He added that the cost of primary goods and labor has continued to rise in recent months.

China’s consumer inflation gained 7.7 percent year-on-year in the first seven months, as food and oil prices rose to record highs during the period. Although consumer inflation eased to 6.3 percent in July, it was still far short of the government’s aim to bring annual inflation within 4.8 percent this year.

The government will maintain “a proper scale” of investment in the second half in a bid to continue the economy’s stable growth, Zhu said.

Similarly, the authorities will take measures to enhance the contribution of domestic consumption to economic growth.

In the agriculture sector, the central government paid 102.9 billion yuan ($15 billion) in subsidies in the first half. The amount was twice what it had earmarked for the sector in the same period a year ago, the NDRC reported.

As a result, China’s grain production amounted to 120.4 million tons, a record high. The authorities also managed to restore pork and vegetable production, despite natural disasters such as snowstorms and earthquake hitting the economy hard, Zhu said.

However, analysts have said that the outlook for the sector is uncertain with extreme weather posing a challenge.

Rising prices of fuel and fertilizer have also eaten into the profits of farmers, which may serve to discourage increases in production in the second half, Zhu said. He added that the government will continue to support the agriculture sector.

Momentum is building for a fresh dose of economic stimulants to boost the country out of the doldrums — perhaps by putting more money in Americans’ pockets. The White House said Monday that President Bush was open to some sort of action after Federal Reserve Chairman Ben Bernanke warned the slump could drag on without the extra bracing tonic.

On Wall Street, stocks bolted higher, with the Dow Jones industrials rising 413 points. There also were some new signs that credit conditions were thawing a bit.

The national economy, already wobbling, has been rocked by a trio of hard punches from the housing, credit and financial crises. With a recession widely seen as inevitable, if not already under way, the focus in Washington has shifted to the questions of how bad, how long and how to limit the pain.

There is increasing talk of a post-election special session calling Congress back to the Capitol. But urgency varies greatly according to whom you talk to — and when.

“We’re continuing to have conversations with members of Congress, and we’re open to ideas that they would put forward … that would stimulate the economy and help us pull out of this downturn faster,” White House press secretary Dana Perino said around noon Monday, shortly after Bernanke endorsed the need for a fresh and “significant” round of government action.

A couple of hours later, Bush seconded Perino’s remarks, but he also said in a more optimistic tone: “I have heard that people’s attitudes are beginning to change from a period of intense concerns — I would call it near panic — to being more relaxed.” He commented after a closed meeting with business leaders in Alexandria, La.

If congressional leaders and Bush — who has been cool to more federal stimulus spending given already exploding budget deficits — were to hash out an acceptable package, it would require a special session after the Nov. 4 elections.

If an agreement can’t be worked out, the effort probably would be taken up by the next Congress and the next president. Democrat Barack Obama has strongly advocated more government stimulus, while Republican John McCain is keeping his options open.

House Speaker Nancy Pelosi of California and fellow congressional Democrats are pushing a package that could cost as much as $150 billion. Some economists, however, have advised them in recent days that to have a real impact, the total would have to be far larger, as much as $300 billion.

As part of that package, Democrats want to resurrect a $61 billion House-passed measure that included about $37 billion in public works spending, $6 billion to extend jobless benefits, $15 billion to help states to pay their Medicaid bills and $3 billion in food stamp assistance for the poor.

The Democrats also are considering a second round of tax rebates to follow the $600 to $1,200 checks most individuals and couples got earlier this year. That money, going directly to consumers in hopes they would spend it, could push the price tag much higher.

Unemployment — now at 6.1 percent — is expected to hit 7.5 percent or higher next year. And millions of Americans have been watching their retirement nest eggs and home values shrivel.

One-third of Americans are worried about losing their jobs, half fret they will be unable to keep up with mortgage and credit card payments, and seven in 10 are anxious that their stocks and retirement investments are losing value, according to an Associated Press-Yahoo News poll of likely voters released Monday.

Sen. Charles Schumer, D-N.Y., a member of the Democratic leadership, predicted Congress would return in November. “We couldn’t have gotten a better supporter for a stimulus package than Ben Bernanke,” Schumer said. “His support will change the stimulus from a possibility to a reality.”

Pelosi said, “I call on President Bush and congressional Republicans to once again heed Chairman Bernanke’s advice and as they did in January, work with Democrats in Congress to enact a targeted, timely and fiscally responsible economic recovery and job creation package.”

However, in an interview with The Associated Press last Friday, Pelosi had said Congress is unlikely to approve a tax rebate before Bush leaves office, and she signaled that prospects were dim that Democrats would be able to strike a deal with the president on an economic aid package during a post-election session.

In February, Congress enacted a $168 billion stimulus package that included tax rebates for people and tax breaks for businesses. The rebate checks did help to lift economic growth in the spring. After that, though, consumers cut back sharply and businesses have retrenched in turn.

“With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate,” Bernanke told the House Budget Committee. It marked the first time Bernanke endorsed the need for another round of economic stimulus.

The Fed chief suggested that Congress design the package to limit the longer-term affects on the government’s budget deficit, which hit a record in the recently ended budget year and is undoubtedly headed higher.

Bernanke said the package also should include provisions “to help improve access to credit by consumers, home buyers, businesses and other borrowers.”

He also left the door open to further interest rate reductions by the Federal Reserve itself.

Fed policymakers meet next on Oct. 28-29, and many economists believe they will again lower their key rate — now at 1.50 percent — to bolster the economy. Just a few weeks ago, the Fed and the world’s other major central banks joined forces to ratchet down rates, the first coordinated action of that kind in the Fed’s history.

There were some signs that credit problems were improving a bit. Bank-to-bank lending rates fell for a sixth straight day on Monday. Demand for Treasury bills, regarded as the world’s safest investment, lessened somewhat but remained relatively high in a sign that there was still much fear in the markets.

Last week, the Treasury Department announced it would inject up to $250 billion in US banks in return for partial ownership. So far this year, 15 banks have failed, including the largest US bank failure in history, compared with three last year. And major Wall Street investment firms have been swallowed by other companies, have filed bankruptcy or have converted themselves into commercial banks to weather the financial storm.