The government has issued letters to seize the assets used as collateral, but had not physically taken them over due to 'obstacles on the ground'.
Auditor-General Nik Azman Nik Abdul Majid says half of the new loans were used to pay loans which have matured when they should be paid with surplus revenue.
China has invested more than US$843 billion to build roads, bridges, ports and hospitals in some 163 nations since the Belt and Road Initiative was announced in 2013.
The government can either 'politely' ask banks or flex its muscles on renewing licences or even invoke its emergency powers, says Derek Fernandez.
Tengku Zafrul Aziz also challenges Najib's claim that RM115 billion was borrowed from January to May, saying the former PM also included loans by government-linked companies such as Petronas and Khazanah.
New loan applicants should make use of the various programmes under initiatives like Penjana, they say.