"It seems that speculators are shifting from major cities to shield from government restrictions," said Liu Ligang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. "The property measures are only working in some cities but not nationwide, and it is raising new challenges for the government."

"Reduced bank lending, rising interest rates and increasing property supply would inevitably bring down sales and profit margins while also worsening their balance sheet liquidity for some developers," said Moody's Investor Service in a recent report.

The tightening measures would hinder further price rises and lead to a mild correction in cities where housing price soared over the past 12 to 18 months, said the credit rating agency.

Power Pinch

China's thermal power generators are struggling to make ends meet as coal prices surge.

From January to April, the country's five largest electricity companies—Huaneng, Datang, Huadian, Guodian and China Power—incurred combined losses of 10.57 billion yuan ($1.6 billion) from thermal power generation, 7.29 billion yuan ($1.1 billion) more than the loss during the same period last year, said the China Electricity Council (CEC).

The March steam coal price at Qinhuangdao Port, an industry benchmark in the country, climbed at least 5 percent from the previous year.

"The power sector is suffering serious setbacks, which makes it harder to ensure electricity supplies during the peak season this summer," said the CEC.

Power shortages are sweeping China, especially eastern and southern regions. East coastal Zhejiang Province and Jiangsu Province, for example, started rationing electricity in May.

To avoid further losses, many smaller power plants have cut or even halted production, exacerbating power shortages, said Han Xiaoping, Chief Information Officer of China5e.com, a major energy information site.

But the root cause lies in the unbalanced pricing system, said Lin Weibin, Deputy Director of the Research Center of Energy and Strategic Resources under Beijing Normal University.

The government has kept on-grid power tariffs under control while coal prices are allowed to float in line with market demand, he said.

As a result, a permanent solution is to deregulate electricity prices and, at the same time, make a push into renewable energies to wean off reliance on coal, said Lin.

Hanvon's Woes

Hanvon Technology Co. Ltd. is facing serious headwinds as the e-reader manufacturer reels from plunging sales.

The Shenzhen-listed company reported 46.18 million yuan ($7.1 million) of losses for the first quarter of 2011, compared with profit of 41.87 million yuan ($6.4 million) in the same period last year. Its sales revenues totaled 158 million yuan ($24.3 million), nose-diving 50.1 percent year on year.

Hanvon is China's largest producer of e-readers that provide a paper-like reading experience. Liu Yingjian, chairman and founder of the company, attributed the losses to heavy expenses on advertising and technology research, as well as the impact from Apple's iPad.

An iPad buying spree across the country since last year has put a dent in Hanvon's sales. The Chinese company sold 149,800 e-readers from January to March this year, down 22.62 percent from the last quarter of 2010, according to data from the Beijing-based Zero2IPO Research Center.

"High prices have impeded customer acceptance of Hanvon products," said Zhang Yanan, a senior analyst with Zero2IPO. "That has put an onus on the company to reduce costs and lower prices."

Despite the deep downturn, Liu still saw a bright growth outlook for his company. "As more of an entertainment terminal, the iPad cannot replace e-readers," he said.

Moreover, the company will shift its business model to rely more on books rather than e-reader sales, said Liu.

Hanvon is expanding its online store to provide more than 300,000 books for customers to download, he said.