Source: Wall Street Journal                          date: 12 October, 2011

Housing prices in China declined for the first time this year and it has cut government-controlled fuel prices in response to a fall in oil prices world-side. Although both of these developments will help battle rising inflation, a fall in housing demand could affect imports of base materials from Mongolia.
Inflation has been a top priority for Chinese policy makers.
Cheaper fuel prices will help ease pressure on the population and stimulate growth said the National Development and Reform Commission. Unfortunately, housing and oil prices will not likely have a huge affect on China's consumer-price index (CPI) because of how it is calculated by the National Bureau of Statistics. Food prices are the most important to this date because food accounts for 30 percent of CPI. Housing costs are the second largest criterion, but housing prices are not included in that measure. Instead mortgage interest rates and utilities play a more important role.
The average home prices were CNY 8.877 in September.  Housing sales in major cities have slowed in recent months after China implemented a series of measures to curb property speculation in an effort to makes homes more affordable, the government introduced higher interest rates and limits on house purchases. The economic planning agency also plans to lower gas prices by 3.2 percent and 3.5 for diesel.