Just as the fallout from the mainland's last lending binge starts to show, Beijing faces a quandary: whether to fall back on a similar stimulus to boost its slowing economy.
Mainland banks' bad loans increased for a second quarter, the first time in about six years, according to the China Banking Regulatory Commission (CBRC).
Non-performing loans (NPLs) rose by 10.3 billion yuan (HK$12.6 billion) in the first three months to 438.2 billion yuan.
However, the NPL ratio - bad debt against total loans - fell slightly, by 10 basis points, from the end of December to 0.9 per cent, on the back of a growing loan base.
The deterioration in credit quality is the result of massive lending to infrastructure and property projects after the financial crisis in an effort to boost the economy.
That said, the government may again have to resort to a similar stimulative policy in the near to medium term as the country faces a slowdown and weak investment sentiment, worsened by sluggish exports.