China has acknowledged there are debt issues with some projects under its One Belt One Road (Obor) Initiative, including Malaysia's move to issue a stop-work order on the East Coast Railway Link (ECRL) project.

Speaking on the sidelines of annual International Monetary Fund and World Bank meetings in Bali, the country's finance vice-minister Zou Jiayi told Reuters that Beijing fully respected Malaysia’s decision-making and judgment.

Zou said this was as the projects were signed on a commercial basis, with countries free to vet and evaluate the terms of the projects.

"Malaysia adequately communicated with the China side on the issue. We respect Malaysia’s decision based on their debt sustainability analysis."

Reuters also quoted Zou as saying that Beijing would strengthen macro-supervision on the debt sustainability aspect of its overseas investments.

"The debt sustainability issue of Obor (projects) is a complicated issue, but we will take care of it," she said.

Zou said China could optimise and diversify its Obor debt financing with more FDI, public-private partnerships, and equity investment, as opposed to potentially more costly commercial loans.

Beijing has been promoting the Obor plan 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.

But the initiative has been met with growing scepticism as some countries, such as Sri Lanka, became saddled with debt they had difficulty in repaying.

Last month, the China Communications Construction Company Limited (CCCC) defended the 688-km ECRL project that Prime Minister Dr Mahathir Mohamad deemed overpriced.

In a rare interview conducted at the company's Beijing headquarters, CCCC vice-president Sun Ziyu (photo) explained the RM66.78 billion project cost, saying the price is "not high."

The ECRL, which was first approved by the previous BN administration in October 2016, was issued a suspension notice in July this year following heavy criticism about the cost of the project from the Pakatan Harapan government.

On Aug 28, Mahathir said the government received an offer as low as RM10 billion for the ECRL, and claimed the previous administration was paying RM55 billion for a project that is worth no more than RM30 billion.