PETALING JAYA: The Chinese government fully respects Malaysia’s decision-making and judgment on the East Coast Rail Link (ECRL) project, Reuters quoted the country’s vice-finance minister Zou Jiayi as saying.
She stressed that the projects were inked on a commercial basis and countries were free to vet and evaluate the terms of the projects.
“Malaysia adequately communicated with China’s side on the issue. We respect Malaysia’s decision based on their debt sustainability analysis,” Reuters quoted her as saying in Nusa Dua, in Bali, Indonesia.
Malaysia had recently stopped work on the US$20 billion rail link between its east and west coasts, a rare setback for China’s Belt and Road initiative.
Zou, meanwhile, acknowledged debt issues with some of its “Belt and Road” projects, saying the government will strengthen macro-supervision on the debt sustainability aspect of its overseas investments.
China has been promoting the ambitious Belt and Road initiative since 2013, as President Xi Jinping expands trade corridors along a modern-day Silk Road linking Asia, Europe and Africa, pumping credit into building roads, railways and ports in a trillion-dollar infrastructure initiative.
“The debt sustainability issue of Belt and Road (projects) is a complicated issue, but we will take care of it,” Reuters quoted Zou as telling a panel on the sidelines of the annual International Monetary Fund and World Bank meetings in the Indonesian island of Bali.
The senior finance official said China could optimise and diversify its Belt and Road debt financing with more foreign direct investment, public-private partnerships, and equity investment, as opposed to commercial loans that could be more expensive.
The initiative has met with growing scepticism as some countries, such as Sri Lanka, became saddled with debt which they had difficulty in repaying, Reuters reported.