Some experts say that Beijing wants to give Brunei economic benefits to reduce SouthEast Asian countries’ pressure on China over issues in the South China Sea.
Last Friday, November 18, Chinese leader Xi Jinping met with Brunei Sultan Hassanal in Thailand. The two sides said that both countries would celebrate the 5th anniversary of the China-Brunei strategic partnership next year.
In the last ten years, Chinese and deputy state leaders have been to Brunei frequently. It was in 2018 with a state visit by Xi Jinping, or last year with Chinese foreign minister Wang Yi. During Wang’s trip last year, both sides mentioned building big projects like the Zhejiang Hengyi Petrochemical plant and the Guangxi-Brunei Economic Corridor.
For this matter, Professor Jenn-Jaw Soong, the director of the Center for Southeast Asian Studies at National Cheng Kung University, had a say.
He said that China wants to push forward two-way cooperation. In return, China can have political security, the chance to compete for oil and gas resources, and get international voting rights to reduce pressure on itself in the South China Sea conflict.
What would Brunei have in return?
According to Professor Jenn-Jaw Soong, China’s One Belt, One Road initiative could help Brunei with its problems with an economy and society that are too dependent on oil and gas.
The professor said few other big countries except China are willing and can help Brunei build a diversified economy with agriculture, fishery, and e-commerce. Besides, with the help of petrochemical smelters funded by China, Brunei can switch from exporting crude oil at low prices and importing refined oil at high prices. This will increase the value of Brunei’s oil and gas industrial chain.
For example, in 2011, China’s Zhejiang Hengyi Group put more than $3 billion into a crude oil refinery project on Great Mora Island Muara Besar Island in Brunei. In 2020, the company announced an additional $13.65 billion in the project. It is considered the most significant project funded by foreign money in the area.
And China’s strategy in Brunei works.
In a 2020 report titled “Comprehending Brunei Darussalam’s vanishing claims in the South China Sea,” lecturer Bama Andika Putra from Hasanuddin University argued that China’s investment is swaying Brunei. Brunei is stopping the territorial dispute between itself and China, as it does not raise it as hard as other Southeast Asian countries with claims in the South China Sea like Vietnam, Indonesia, Malaysia, and the Philippines.
Furthermore, Brunei does not have leverage or provide foreign policy to resolve the South China Sea issue like other countries.
But Brunei’s exchange for economic interest also comes with a price.
Chen Jiaxing is a Malaysian-Chinese businessman who has lived in Brunei for 40 years. He raised concerns about Chinese investment. He said that in many Belt and Road Initiative projects, Chinese and Bruneian capital often have to compete with each other.
The “Belt and Road project” has caused locals to sell resources, land and privileges at a low price. That is why regular people protest regularly.
He thinks Brunei has too much trade with China, so it needs to pay attention to the bilateral relationship. He cited the examples of Japan, South Korea, and Taiwan, countries with strong trading ties with China. The people in these countries still have a strong anti-China sentiment.