* SSEC -0.2%, CSI300 -1.3%, HSI 0.2% * HK->Shanghai Connect daily quota used 2.9%, Shanghai->HK daily quota used -0.9% * FTSE China A50 -1.3% SHANGHAI, May 6 (Reuters) - China stocks fell on Thursday as healthcare firms declined following investors’ return after the Labour Day break, and as Sino-West tensions weighed. ** The CSI300 index fell 1.3% to 5,057.17 points at the end of the morning session, while the Shanghai Composite Index lost 0.2% to 3,439.12 points. ** The tech-heavy start-up board ChiNext dropped 3.2%, while Shanghai’s STAR50 index slipped 1%. ** The CSI300 healthcare index fell the most, down 4.8%, as vaccine makers retreated after U.S. President Joe Biden threw his support behind waiving intellectual property rights for COVID-19 vaccines. ** China’s domestic liquidity conditions are marginally tightening as compared with March and April, as interest rates could easily go up and would be difficult to bring down, while there is room for a further rise in U.S. treasury yields, Founder Securities analysts said in a report. ** Chances are low for a comprehensive pick-up in risk appetite now given lofty valuations in some parts of the market, while it’s hard to see a directional change in Sino-U.S. relations, the brokerage added. ** U.S. Trade Representative Katherine Tai said on Wednesday she expects to engage “in the near term” with Chinese officials to assess their implementation of the “Phase 1” trade deal between the two countries, with the outcome to influence the fate of Washington’s punitive tariffs on Beijing. ** Tensions between China and other western countries also soured sentiment. ** The European Union took steps on Wednesday to guard against economic competition from China that it deems unfair, a sign of growing distrust after Western sanctions over rights abuses and Chinese retaliation. ** China “indefinitely” suspended on Thursday all activity under a China-Australia Strategic Economic Dialogue, its state economic planner said, the latest setback for their strained relations. ** The Hang Seng index added 0.2%, to 28,466.89 points, while the Hong Kong China Enterprises Index lost 0.2%, to 10,702.58. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Vinay Dwivedi) Our Standards: The Thomson Reuters Trust Principles.