China stocks slip on stimulus doubts, Hong Kong also weaker
* CSI -0.6 pct, SSEC -0.7, HSI -0.5 pct
* Growing doubts on further monetary stimulus weigh on sentiment
* Financial companies and manufacturers ease
SHANGHAI, July 22 (Reuters) - China stocks fell on Friday after a central bank official cast doubts over the likelihood of further interest rate cuts and as investors took profits following the previous day's bounce.
The CSI300 index fell 0.6 percent, to 3,232.14 points at the end of the morning session, while the Shanghai Composite Index lost 0.7 percent, to 3,018.82 points. Both indexes are down more than 1 percent for the week so far.
Sheng Songcheng, director of the Survey and Statistics Department at the People's Bank of China, said on Friday that tax cuts would be a more effective way of stimulating the economy than interest rate cuts, the National Business Daily reported on Friday.
Sheng added that China was caught in a "liquidity trap," meaning that driving rates down further would have little effect on real investment.
"The most important reason for the deviation between the increase in M1 (money supply) and the growth of the economy is that enterprises lack the willingness to invest," Sheng was quoted as saying.
Finance shares led indexes lower on the diminished prospects of more policy stimulus, with manufacturing shares also weighing heavily. Continuación...