The Global Fund to Fight AIDS, Tuberculosis and Malaria has halted payments for programmes in China amid mismanagement by a public agency, a spokesman said on Monday.
"In May, we froze all disbursements in China," said Andrew Hurst, spokesman of the Global Fund, confirming media reports.
"We have identified weaknesses in the quality of the implementation of the finances in China," he added.
In November, the Global Fund had halted the disbursement of funds for the Chinese Centre for Disease Control and Prevention (CDC), said Hurst.
"We believe that the main recipient, the CDC, had violated an accord of the Global Fund which said that a part of the financing accorded, at least 35 percent, must go through community organisations," he added.
The spokesman noted that its representatives and Chinese authorities held "high-level talks" last week in China to find a solution.
Hurst said the CDC agreed to meet the Global Fund's requirements by certain deadlines.
"If it respects these deadlines, the disbursement to China can restart," he said.
Launched about 10 years ago, the Global Fund is the world's biggest single source of funding to tackle three of the world's greatest killer diseases, with an overall budget of $21.7 billion drawn from 150 countries and private donors.
However, the public-private partnership has been hit by corruption problems over the past few months.
In December, the Geneva-based organisation said that $34 million went missing in four African countries -- Djibouti, Mali, Mauritania and Zambia.
It has since appointed a team to improve its financial control and oversight procedures.
The Global Fund has disbursed over $539 million in China where it has been active since 2003.