China stocks gave up early gains as a late afternoon slide in property shares wiped out initial optimism triggered by encouraging industrial profit data released over the weekend.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.9 per cent, to 3,169.73, while the Shanghai Composite Index lost 0.7 per cent, to 2,957.82 points.

Backed by Sunday data showing industrial profits of Chinese firms returning to growth in the first two months of the year despite a slowing economy, the indexes were firm in morning trading.

However, the equity gauges were dragged lower by property shares in afternoon trade, amid media reports that financial regulators in the eastern province of Zhejiang had begun to closely scrutinize real estate financing, and warned against financial risks associated with rapid property price rises in cities such as Nanjing and Suzhou.

Amid fears that real estate curbs, already adopted in Shanghai and Shenzhen, could spread to other cities in the country, major developers including Gemdale Corp properties and Poly Real Estate came down.