MANY foreign-funded power projects in China have been stalled by issues related to finance which could hamper China's economic growth, says the latest Economist Intelligence Unit report. The report came a day after the United States Commerce Secretary Ron Brown expressed frustration at the meagre headway made in power generation deals in China because of red tape. According to the report, a quarter of the infrastructure projects approved by the State Planning Commission last year were in the power sector. China relies on foreign-funded power plants to provide a significant portion of its new power capacity. So far, the successful foreign-funded power plants of any significance were the Shajiao B and C stations in Guangdong, the report said. The stations are to be built by Hopewell Holdings of Hong Kong through its subsidiary Consolidated Electric Power Asia. The project, with a price tag of about US$1.85 billion, was the last of the plants to be built with foreign funds before Beijing's decision on rates of return and on foreign exchange put a brake on power projects. The Chinese Government is against guaranteeing rates of return and compensation for foreign exchange losses in those projects. It hopes to obtain from foreign firms 15 per cent of the $300 billion needed for modernisation and expansion programmes in the next five years. China's current needs for infrastructure were enormous and immediate and there was money to be made from them, the report said. Among the major stumbling blocks for foreign investment in infrastructure projects are foreign exchange, legal concerns, the approval process and inflexible tariffs. The prevailing climate was more conducive to foreign investors to engage in relatively small investments in export-oriented industries, of which the pay-back periods were short, the report said. It also cited figures showing that improvement in roads, railways and port facilities had lagged behind demand though the telecommunications sector grew faster than gross domestic product and faster than planned.