* SSEC and CSI300 flat, HSI -0.7 pct
* Property shares fall as home price growth slows in Sept
* Investors chase environmental shares on policy cues
SHANGHAI, Oct 23 (Reuters) - China shares were flat on Monday morning, with investors piling into environmental stocks but dumping banks and property firms in line with policy cues from a key political congress.
Policymakers at the Communist Party congress in Beijing suggested that Beijing was formulating plans for a free port in Shanghai and accelerating the construction of the Xiong'an special economic zone, which triggered buying in stocks that could benefit from the two projects.
The blue-chip CSI300 index was unchanged at 3,928.39 points at the end of the morning session, while the Shanghai Composite Index was also flat, at 3,379.44 points.
Investors are turning cautious amid signs that China's economic recovery may be losing steam, as they await quarterly earnings from a slew of companies this week that could serve as a barometer of the country's economic health.
Chen Xiaopeng, strategist at Sealand Securities, expected the market to face correction pressure in the fourth quarter "as liquidity conditions could tighten due to external environment."
The U.S. Federal Reserve is widely expected to raise interest rates again in December, potentially attracting capital from emerging markets.
Real estate stocks came under sustained selling pressure amid deepening fears of tougher government restrictions, as fresh data showed growth in new home prices in China slowed to a crawl in September, rising just 0.2 percent from the previous month.
China's housing minister said on Sunday that the country's property sales would slow in the fourth quarter but prices would remain stable, reiterating the government's position that "houses are for living in, not for speculation."
The banking sector fell 0.6 percent, as Ping An Bank Co kicked off the earnings season for the sector, with a 2.7 percent rise in third quarter net profit. Investors expect the sector to suffer from tougher financial regulations.
Investors are pushing the environmental protection subindex higher, up nearly one percent, as policymakers hinted at the party congress that fighting pollution was one of the government's major tasks.
Meanwhile, Shanghai's listed port operators and trading firms, including Shanghai Material Trading Co, Shanghai International Port and CTS International Logistics Co jumped on news Shanghai was considering developing a free port to boost international trade.
In Hong Kong, stocks fell, weighed by energy and financial shares. The Hang Seng index dropped 0.7 percent, to 28,295.84 points while the Hong Kong China Enterprises Index lost 0.6 percent, to 11,486.61.
(Reporting by Samuel Shen and John Ruwitch; Editing by Jacqueline Wong)