CHINA FAILS TO DELIVER FINANCING FOR BELT & ROAD MALAYSIAN HUB-CONFIRMS SUSPICION THAT CHINA CANNOT FINANCE THE PROJECT WITHOUT LOCAL GOVERNMENT ASSISTANCE
In what looks like an abrupt about turn the Chinese Government has failed to deliver promised financing for what was meant to be the Malaysian hub of Belt and Road initiative.The Wall Street Journal reported:
A deal for a Chinese state-owned company to help bail Malaysia out of a multibillion-dollar financial scandal fell apart Wednesday after the Chinese government refused to authorize the investment.
China Railway Engineering Corp. and a local Malaysian partner had agreed in December 2015 to take a 60% stake in Bandar Malaysia, a major residential and commercial real-estate project in Kuala Lumpur that originally was being developed by 1Malaysia Development Bhd., a Malaysian state fund.
An internal Malaysian Finance Ministry document on problems with the sale, viewed by The Wall Street Journal, said a major reason for its failure was that China’s government declined to give the green light for China Railway to make the investment. A person familiar with the matter confirmed this.
This failure to provide funding under a deal that both countries declared is an important component in China’s One Belt One Road initiative confirms fears that China is not really able to finance the project.