POWER CONSUMPTION: A power transmission tower and wind turbines in Jiuquan, Gansu Province, on May 14. April's electricity consumption totaled 416.5 billion kw nationwide, surging 6.8 percent year on year (WAN ZONGPING)

Record-High Bad Loans

Bad loans from Chinese banks reached their highest level in four years by the end of March, according to data released by the China Banking Regulatory Commission (CBRC), the country's banking sector regulator, on May 15, while their total assets rose by 17 percent.

Outstanding non-performing loans, or NPLs, stood at 526.5 billion yuan ($85.67 billion), up by 33.6 billion yuan ($5.47 million) from the end of 2012, while the ratio of bad loans to total lending rose by 0.01 percentage points to 0.96 percent, during the first quarter of the year.

Bad loans have now increased for a sixth straight quarter—the longest deterioration streak in at least nine years.

Total assets of the banking sector stood at 141.3 trillion yuan ($22.99 billion), meaning total banking assets have increased fivefold in the past decade.

Shang Fulin, CBRC Chairman, warned the bad loan levels are likely to continue rising.

The soured-loan increases were reported across all categories, including among state-owned lenders, joint stock banks and regional banks in cities and rural areas.

Major state-owned banks experienced the biggest jump, as their NPLs rose by 14.6 billion yuan ($2.38 billion) during the quarter. Their ratio of such loans to total lending dropped by 0.01 percent to 0.98 percent.

Joint stock banks reported the biggest increase in their NPL ratio, by 0.05 percent to 0.77 percent, while the amount of their bad loans went up by 9.9 billion yuan ($1.61 billion).

"The rise in non-performing loans is a natural result of an economic slowdown, with increasing defaults among companies, especially small and medium-sized enterprises," said Guo Tianyong, Director of the Research Center of the Chinese Banking Industry at the Central University of Finance and Economics.

However, he suggested the current increase in soured loans was still mild, and the amount may decrease in the following months, as the economy stabilizes.

Fiscal Revenue Drops

The Central Government fiscal revenue fell in April as business tax income dropped but booming home transactions lifted local government coffers, the Ministry of Finance said on May 13.

The Central Government's revenue fell 2.2 percent to 535.7 billion yuan ($87.1 billion) from a year earlier, after slipping 0.2 percent in March. It is the first time that the Central Government has seen its revenue shrink for two consecutive months since September.

The ministry attributed the decline to a "very slow" increase in corporate tax and a decline in tariffs from imports.

The ministry cautioned that fiscal revenue will be under pressure this year due to a likely slower industrial output growth, worsening corporate profits and structural tax-cutting measures.

However, the local government revenue rose 14.7 percent to 607.4 billion yuan ($98 billion), 1 percentage point faster than in March, as housing transactions rose and tax revenue boosted, according to the ministry.