China's looks poised to tighten monetary and credit policies
China's finance ministry has failed to sell all 28bn yuan ($4.1bn; £2.55bn) of one-year government bonds it offered at an auction.
It is the first under-subscribed government bond auction since 2003.
The ministry sold a total of 27.52 billion yuan of the bonds, which offered a yield to investors of 1.06%.
It comes as the government looks to tighten its monetary policy to prevent the risk of asset bubbles, loan defaults and rapid inflation.
Meanwhile, the Chinese city of Hangzhou has started tightening mortgage lending terms, ahead of any changes to monetary and credit policies by the national government.
The signs that China may ditch its loose monetary policy dragged down bank stocks in Hong Kong and Shanghai on Wednesday.
Chinese property prices nationwide have increased since March, after seven months of falls.
The price increases follow measures introduced in the second half of 2008 to boost demand for housing, such as reduced mortgage rates.
Hangzhou has doubled the minimum deposit for purchases of second homes to 40%, and also increased the rate on mortgages for second homes to 10% more than the benchmark set by the central bank.