Stocks in China fell on Monday morning as the threat of US tariffs on nearly all of China's exports to the United States continued to hover over markets, and as a tweet from US President Donald Trump shook suppliers of tech giant Apple.

At the midday break, the Shanghai Composite index was down 17 points or 0.63 per cent to 2,685.30. China's blue-chip CSI300 index was down 0.91 per cent, with its financial sector sub-index lower by 0.41 per cent, the consumer staples sector down 0.69 per cent and the real estate index up 1.68 per cent.

Chinese H-shares listed in Hong Kong fell 0.89 per cent at 10,465.61, while the Hang Seng Index was down 0.89 per cent at 26,733.86.

Trump had warned on Friday he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days.

China had said on Friday it will increase export tax rebates for 397 items ranging from some steel products to electronic ones, in a bid to boost the prospects for shipments amid its trade war with the United States.

China's trade surplus with the United States widened to a record in August even as the country's export growth slowed slightly, an outcome that could push President Donald Trump to turn up the heat on Beijing in their cantankerous trade dispute.

Shares in China-based Apple concept firms fell after US President Donald Trump tweeted on Saturday that Apple Inc should make products in the United States if it wanted to avoid tariffs on Chinese imports.

Shares in Apple suppliers Luxshare Precision Co Ltd, Shenzhen Sunway Communication Co Ltd and Suzhou Dongshan Precision Manufacturing Co Ltd fell as much as 10 per cent on Monday morning. The smaller Shenzhen index was down 1.08 per cent and the start-up board ChiNext Composite index was weaker by 1.61 per cent.

China's annual consumer inflation accelerated to 2.3 per cent in August, the fastest pace since February this year and beating expectations, official data showed on Monday.

China's drug safety body has found no problems in its inspection of 45 vaccine makers and will step up supervision of vaccine quality, it had said on Friday, following a scandal that put children at risk.

A sub-index of the CSI300 tracking healthcare firms was down 1.24 per cent at midday. Chinese conglomerate HNA plans to sell its 7.6 per cent stake in German lender Deutsche Bank over the next 18 months. Shares in Hainan Airlines Holding Co Ltd are down 1 per cent.

Shares in East Money Information tumble as much as 10 per cent to a near seven-month high, leading a slump in brokerage firms, as low levels of trading volumes eat into their profits. Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.68 per cent, while Japan's Nikkei index was up 0.26 per cent.

The yuan was quoted at 6.8611 per U.S. dollar, 0.17 per cent weaker than the previous close of 6.8492. The largest percentage gainers in the main Shanghai Composite index were Henan Pinggao Electric Co Ltd, up 10.08 per cent, followed by SEC Electric Machinery Co Ltd, gaining 10.04 per cent and Xinjiang East Universe Group Gas Co Ltd, up by 10.01 per cent.

The largest percentage losses in the Shanghai index were Jiangsu Yangnong Chemical Co Ltd, down 9.87 per cent, followed by Anhui Great Wall Military Industry Co Ltd, losing 9.25 per cent and Nanjing Central Emporium Group Stocks Co Ltd, down by 8.17 per cent.

So far this year, the Shanghai stock index is down 18.29 per cent, while China's H-share index is down 9.8 per cent. Shanghai stocks have declined 0.84 per cent this month. The top gainers among H-shares were China Railway Group Ltd, up 1.49 per cent, followed by Guangdong Investment Ltd , gaining 1.33 per cent and PetroChina Co Ltd, up by 0.69 per cent.

The three biggest H-shares percentage decliners were ZhongAn Online P & C Insurance Co Ltd, which has fallen 5.89 per cent, Anhui Conch Cement Co Ltd, which has lost 4.3 per cent and Hengan International Group Company Ltd, down by 4.1 per cent.

About 6.01 billion shares have traded so far on the Shanghai exchange, roughly 49.9 per cent of the market's 30-day moving average of 12.05 billion shares a day. The volume traded was 10.75 billion as of the last full trading day.

At midday, China's A-shares were trading at a premium of 20.30 per cent over the Hong Kong-listed H-shares. The Shanghai stock index is below its 50-day moving average and below its 200-day moving average.

In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 0.2 per cent, while the IT sector fell 0.7 per cent. The top gainer on Hang Seng was Wharf Real Estate Investment Company Ltd, up 2.39 per cent, while the biggest loser was Hengan International Group Company Ltd, which was down 4.14 per cent.

(Reporting by Andrew Galbraith; Editing by Sunil Nair)

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