SHANGHAI, May 10 (Reuters) -
Chinese stocks fell on Friday, as geopolitical concerns dented investor sentiment following a trade restriction list issued by the Biden administration and potential new China tariffs, while Hong Kong shares tracked regional markets higher.
Bloomberg News reported on Thursday that China is considering a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought via Stock Connect, also lifting Hong Kong shares.
Asian stocks rose, on course for a third week of gains, while the dollar was on the back foot as fresh signs of an easing U.S. labour market stoked optimism around interest rate cuts this year ahead of next week's crucial inflation data.
The Biden administration added 37 Chinese entities to a trade restriction list on Thursday, including some for allegedly supporting the spy balloon that flew over the United States last year, heightening tensions between Beijing and Washington.
U.S. President Joe Biden is also set to announce new China tariffs as soon as next week targeting strategic sectors, and the full announcement is expected to largely maintain existing levies, a source told Reuters.
** At the midday break, the Shanghai Composite index was down 0.22% at 3,147.25 points.
** China's blue-chip CSI300 index was down 0.28%, with its financial sector sub-index 0.91% higher, the consumer staples sector down 0.78%, the real estate index up 2.72% and the healthcare sub-index 0.81% lower.
** Chinese H-shares listed in Hong Kong rose 1.8% to 6,679, while the Hang Seng Index was up 1.74% at 18,859.60.
** For the week, the CSI 300 was up 1.4% so far and the Hang Seng added 2.1%.
** The smaller Shenzhen index was down 0.86%, the start-up board ChiNext Composite index slipped 1.16% and Shanghai's tech-focused STAR50 index was down 1.8%.
** Around the region, MSCI's Asia ex-Japan stock index advanced 0.65%, while Japan's Nikkei index rose 0.26%. (Reporting by Shanghai Newsroom; Editing by Eileen Soreng)
