* SSEC -0.1 pct, CSI300 -0.2 pct, HSI -0.7 pct
* Asia, Wall St drop as tariff risk persists
* PBOC releases liquidity, interest rates fall
* China imports beat estimates, exports unexpectedly shrank
HONG KONG, May 8 (Reuters) - China stocks eased on Wednesday as foreign investors sold shares on fears of an escalation in trade spat between Beijing and Washington, but cheaper valuation and central bank support kept losses in check. ** At the midday break, the Shanghai Composite index was down 0.1 percent at 2,923.15 points, while the blue-chip CSI300 index lost 0.2 percent. ** CSI300’s financial sector sub-index dropped 0.5 percent, the consumer staples sector rose 0.3 percent, the real estate index climbed 0.2 percent and the healthcare sub-index was down 0.3 percent. ** Chinese H-shares listed in Hong Kong dropped 0.9 percent, while the Hang Seng Index eased 0.7 percent to 29,156.23. ** The smaller Shenzhen index rose 0.8 percent and the start-up board ChiNext Composite index climbed 0.3 percent. ** Chinese Vice Premier Liu He will travel to Washington for two days of trade talks this week, China said on Tuesday, setting up a last-ditch bid for a deal that would avoid a sharp increase in U.S. tariffs on Chinese goods. ** U.S. officials have accused China of reneging in the past week on substantial commitments made during months of negotiations aimed at ending their trade war, prompting Trump to issue a new deadline to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent. ** A-shares opened down 2 percent, tracking Wall Street’s overnight slide on trade war escalation fears. MSCI’s Asia ex-Japan stock index was weaker by 0.5 percent while Japan’s Nikkei index was down 1.6 percent. ** However, China stocks pared losses after a disappointing opening. Zhang Qi, an analyst at Haitong Securities in Shanghai, said the large week-to-date fall also helped take out some bets shorting the market, placed when share prices were higher. “There are also investors buying the dip,” he added. ** The People’s Bank of China injected 10 billion yuan $1.48 billion) through seven-day reverse repos on Wednesday, bringing the net injection so far this week to 50 billion yuan. The move sent benchmark overnight repo, a key gauge of interbank liquidity, to a four-month low of 1.04 percent. ** Official data on Wednesday showed that China’s exports unexpectedly shrank in April but imports surprised with their first increase in five months, painting a mixed picture of the economy. ** China’s foreign exchange reserves also registered a surprise decrease for the first time in six months in April, despite recent data that suggested the country’s economy is starting to steady in response to stimulus measures. ** The largest percentage losses in the Shanghai index were TVZone Media Co Ltd and Kangmei Pharmaceutical Co Ltd, down 10 percent, followed by Fangda Special Steel Technology Co Ltd, which lost 8.1 percent. ** As of midday, China’s A-shares were trading at a premium of 23.45 percent over the Hong Kong-listed H-shares. ** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.
Reporting by Noah Sin, Editing by Sherry Jacob-Phillips