* Hang Seng at one-month low; China Life drags for second day
* Drop limited as ICBC, China Unicom underpin after results
* HK short-selling highest in over 1-½ months
* Hang Seng down 1.9 pct on week, Shanghai loses 1.2 pct (Updates to close)
By Vikram Subhedar and Lu Jianxin
HONG KONG/SHANGHAI, Aug 27 (Reuters) - Hong Kong stocks slipped on Friday, with the Hang Seng hitting a one-month low, as shares in China Life Insurance extended their slide after it posted disappointing results.
The Hang Seng Index ended down 0.1 percent at 20,597.4 points, marking its third straight week of losses, as a string of poor economic data from the United States stoked fears that it could be sliding back into recession.
China's key stock index edged up 0.3 percent, but lost 1.2 percent on the week as uncertainties about the government's policies and weak regional markets sparked profit-taking in certain sectors.
China Life Insurance fell 1.8 percent to a 13-month low, extending its slide to 8 percent in just two days after the world's largest insurer by market value ocompany took hits on its stock market investments.
While China Life's slide took a toll on the Hang Seng Index, results from other blue-chip Chinese companies helped limit broader losses.
ICBC rose 1.3 percent after the world's most valuable bank reported a record profit for the second quarter, even while warning of challenges ahead including bad loans.
Earnings from Chinese blue chips have generally beaten expectations, but heightened worries about the U.S. economy have taken a toll on riskier assets globally and battered investor confidence.
"The U.S. and European economies are still in the doldrums and while Asia is relatively much better, stock markets here are being affected by weakness overseas," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "Nobody is really willing to buy anything at the moment.
Turnover remained subdued through the week with the average weekly volume on the Hong Kong stock exchange dropping 9 percent.
In one sign that bearish sentiment is growing, short-selling activity as a percentage of total turnover ticked up to its highest level in over six weeks on Thursday.
SHANGHAI EDGES UP
The Shanghai Composite Index finished at 2,610.7 points, with analysts expecting it to move narrowly around the 2,600-level early next week.
Market players were reminded of government concerns over sky-high property prices as local media gave prominent coverage to a speech by Zhang Ping, head of China's top economic planner, who said housing prices in some major cities remained too high and the government would continue to control them.
"How property market policies will evolve in the near term remains the market's focus, and investors will not rush into trading until there is some clarification," said Wen Lijun, analyst at Nanjing Securities.
Three-fourths of China's nearly 2,000 listed firms have now posted first-half earnings, and they have reported combined net earnings jumped 40 percent from a year earlier, state media said.
"Caution on what the government will do next in the property market is capping gains despite strong first-half corporate earnings," said Ren Chengde, senior stock analyst at Galaxy Securities in Shanghai.
Qingdao Huaren Pharmaceutical Co was Friday's biggest loser, dropping 5.6 percent as drug makers as investors pocketed gains after the recent rally. ($1=6.8 Yuan) (Editing by Kim Coghill)