China wants to build and is also ready to fund, says China Construction Bank Malaysia

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Bank Pembangunan Malaysia Berhad (BPMB), together with its strategic partner, China Construction Bank (CCB) (Malaysia) Berhad held their first virtual knowledge sharing session on Infrastructure Financing: Challenges and Opportunities.

Chong Fook Jade, Head of Global Banking & Markets from China Construction Bank (Malaysia) Berhad stressed that China wants to build and is also ready to fund.

He started his presentation by saying China wants to build along the Belt and Road, a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in nearly 70 countries and international organizations.

Chong further addressed a misconception that the Chinese state is out to get states of other countries along the Belt and Road into a debt trap, highlighting as a misrepresentation.  

“There is always potential for a country or nation to be caught in a debt trap. But the nation itself needs to look in terms of weighing its pros and cons in taking on this liability to pay for what it gets in return in terms of infrastructural benefits.”

“When we look at a Government funding or the type of concession, it’s very important to ask a fundamental question as to where the funding is from. Because some projects may have special allocation from the Government but others may be under the budget of a certain ministry. This may cause further delay in the project due to approval process and other factors,” he clarified.

Chong also said that the Chinese players are already here with representatives in Malaysia, to show their commitment towards potential projects.

“The Chinese contractors provide competitive prices due to the scalability from their relative size and are hugely supported by the banks. They are willing to look at Engineering, Procurement, Construction Contract (EPCC) plus Financing type of structure to mitigate the completion risk. Additionally, they are willing to engage with local partners on PFI type deals,” he said.

Chong then concluded that, it is no longer a question of ‘if’ but how much and to what extent Chinese participation will benefit the Malaysian economy.

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