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The Hang Seng Index fell 1.2 percent to 21,695.26 on June 17. The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, declined 1 percent to 12,045.05.

Chinese developers: China's new home prices rose in May from a year earlier in 67 of the 70 cities monitored by the government, the statistics bureau said on its website on June 18.

China Resources Land Ltd. (1109 HK), a state-controlled developer, declined 0.5 percent to HK$12.54. China Overseas Land & Investment Ltd. (688 HK), controlled by the nation's construction ministry, gained 0.8 percent to HK$15.

China is likely to raise interest rates within the next 10 days as price pressures encourage the government to end the longest pause since increases began in October, Nomura Holdings Inc. says.

The world’s second-biggest economy is maintaining momentum and “inflation is still high,” Nomura economist Sun Chi said in a phone interview from Hong Kong today. Sun reaffirmed a forecast for an increase by the end of June.

China’s benchmark stock index slid to the lowest in almost nine months today on concern that monetary tightening to tame inflation will erode company profits and trigger an economic slowdown. Policy makers may be assessing the threats to export demand from weakness in the U.S. economy and a possible Greek default on debt.

China, the largest foreign holder of United States Treasuries, bought more federal bonds in April for the first time since October despite concerns over the US debt level.

China's purchases of US debt rose $7.6 billion to $1.15 trillion - the first month-on-month increase since its holdings reached $1.18 trillion in October, according to the Treasury International Capital report, known as TIC. China boosted its holdings after selling most of its bonds for five straight months.

Overall, foreign nations were net buyers of US long-term securities, with purchases rising by $30.6 billion in April.

An economist calls for the design of 500 yuan ($74) notes to reduce economic losses in the circulation of China's currency RMB, the Yangcheng Evening News reported.

Mao Yushi, an economist in China, said on his micro blog on Tuesday that the 100 yuan note, the largest face value of RMB, requires quadruple counting efforts compared with the 500 yuan note. It also takes up more space, even posing a bigger risk of theft.

Europe will not let the euro fail and European Union countries are committed to cutting deficits, the president of the European Council told Chinese officials on Tuesday, seeking to ease fears that the eurozone crisis could imperil China's investments.

"All EU countries are bringing down public deficits. The most vulnerable countries are undertaking determined action to come out of the crisis," President Herman Van Rompuy said in a speech at the Central Party School in northwest Beijing, which trains rising Chinese leaders.

"I want to acknowledge the confidence that China has demonstrated towards Europe in those difficult moments. A stable eurozone is in our common interest," he said in his prepared remarks to officials studying at the school.