Chinese Property Shares Fall as Beijing Wrestles Rising Prices, Copper Declines

Shares in Asia closed lower Thursday. China's Shanghai Composite Index dropped 2.4% to 3,023 and Hong Kong's Hang Seng Index fell 1.4% to 20,576. In Japan, the Nikkei 225 Index slipped 1% to 10,146.

Chinese developers lost value with Poly Real Estate plunging 2.4% and China Vanke declining 2%. The government has taken measures to slow the out-of-control growth in the property market that has put the dream of owning a home out of reach for many Chinese. In January, the government re-instated a tax on homes sold less than five years from their original purchase date, in an effort to prevent speculators from flipping homes and driving prices still higher, and is now considering capping prices.

A property tycoon, who's a member of one of China's top advisory boards, was criticized in the China Daily today for defending the rising prices. "A man should not complain to the government, society or property developers for not being able to buy a house," he said, calling "for foryoung people to abandon the traditional thought of owning a property for their marriage," said the paper. He went on to say that wealthier people in more developed countries like the U.S. spend their life savings on homes. Tycoons like this one have benefited enormously from the swollen prices that continue to surge. According to Bloomberg, $156 billion was invested in Chinese real estate last year -- more than doubling from the previous year.

Chinese copper mining companies slid lower again today. Prices soared just after the Chilean earthquake, but mines in Chile are back in operation and Chinese miners are giving back some of those gains. Jiangxi Copper fell 2.9 %, Zijin Mining lost 2.7% and Tongling Nonferrous Metals sank 2.6%.

In Hong Kong, banks closed lower with Bank of China losing 3.5%, China Construction Bank losing 2.9% and Industrial and Commercial Bank of China falling 2.5%. HSBC (HBC) dipped 0.5%.

Toy and clothing manufacturer Li & Fung was among the few shares on the Hang Seng to rise today, adding 1.2%. The company manufactures clothing and toys for Kohl's, Walmart and Target, all of which should see increasing sales as the U.S. economy improves.

The Japanese yen gained strength against the dollar, shrinking profits for Japanese companies who sell products abroad and then bring their earnings back home. TDK plunged 2.9%, Sanyo (SANYY) declined 2% and Sony (SNE) fell 1.1%. Camera makers closed lower with Nikon falling 2.3% and Canon losing 0.8%.

Mitsubishi Motors plunged 10.6% after discussions with Peugeot ended. The European car maker was considering purchasing a $3 billion stake in the Japanese company. But perhaps such a deal would only bring Japanese automaker's problems back home.