By frightening off foreign bank financing, China has effectively blocked Hong Kong's $16 billion airport scheme. Without Beijing's blessing, potential lenders consider the project too risky. As a result, the colonial government announced it will delay work on the airport after nine months of bickering with China.

Many observers think the colony will be forced to scrap the controversial plan, which includes expressways, subways, and the world's longest suspension bridge. Mainland officials called the plan too costly and were angry at not being consulted on a project affecting Hong Kong's post-1997 finances.

Hong Kong's government is now exploring whether to sharply scale down its master plan for infrastructure. Some executives are calling for a small expansion of overburdened Kai Tak Airport. Construction of a new facility, they say, should be left to 1997, when China takes over.

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