China may withhold part of the $29.9 billion loans on which Nigeria partly pins its hope of financing next year’s N7.298 trillion budget.

The Chinese government is said to be upset by the Federal Government’s diplomatic recognition of Taiwan as a sovereign nation.

The “cold war” over Taiwan may also affect the implementation of the $80billion MoU between the Nigerian National Petroleum Corporation (NNPC) and China.

The Nation learnt that the Chinese Government raised the matter when President Muhammadu Buhari visited Beijing. He assured his hosts that the status of Taiwan Marketing Mission will be downgraded, nothing has been done, a source said yesterday.

Taiwan and its associated territories are regarded as a province of China.

But the Chinese government got intelligence report that Taiwan Marketing Mission had been operating as a full-fledged mission since the days of former President Goodluck Jonathan.

All efforts to reverse the status were said to have fallen on deaf ears.

Nigeria is seeking $29.9billion loans to augment its plans to finance its budget which was presented to the National Assembly on Wednesday by the President.

Of the $29.9billion loans, the Federal Government’s share is $25.8billion. The states will have a $4.1billion facility.

The details of the loans are as follows:

• 
  The external borrowing plan is a three- year plan covering proposed projects for 2016 – 2018. As such, the borrowings will be phased over the three year period.
• The borrowings are highly concessional (non-commercial), with low interest rates and long tenors.
• The funding is being sought from multilateral institutions, including the World Bank, Africa Development Bank (AfDB), Islamic Development Bank (IDB), Japan International Co-operation Agency (JICA) and China EximBank.
• The planned Eurobond issuance in the international capital markets is the only commercial source of funding.

But the expected components from China EximBank may not come until the diplomatic status of Taiwan Marketing Mission is “well-defined”, the source said.

The source, who pleaded not to be named because of “the sensitive nature of the matter”, said: “The Chinese government is now a bit reluctant to grant loans to Nigeria through its EximBank because of the issue of distrust between the two nations over Taiwan.

“The Chinese government is unhappy with the Federal Government that it is operating a two-China diplomatic policy. The government relates with China and Taiwan on equal basis.

A government source said:
But the Nigerian-China Friendship Association (NICAF) on Wednesday expressed concern over the location of the Embassy of Taiwan in Abuja.

The association asked the government to probe the circumstances behind the upgrading of Taiwan Marketing Mission to an Embassy.

The President of the association, Chief Jacob C.K Wood, said: “Nigerians are free to travel to China and Taiwan to do business. We respect freedom of movement and human rights but business should not be mixed with politics.”

Wood said the UN was yet to withdraw its “One China” policy and expressed confidence that the “Federal Government will not recognise Taiwan as a sovereign country”.

All attempts to get the reaction of the Chinese Embassy in Nigeria were unsuccessful.

An official said: