Unveiled in 2013, One Belt and One Road (OBOR) is an ambitious initiative launched by the Chinese government. It aims at a physical and digital infrastructure capable of connecting more than 60 countries across Asia, Europe and Africa.
Speaking at the 68th anniversary of the Founding of the People’s Republic of China, the Chinese Ambassador to Brunei, Her Excellency Madam Yang Jian, highlighted the project’s ambitions.
“The core of the Belt and Road Initiative is to boost the construction of infrastructure and interconnection, coordinate policies and integrate the development strategies, deepen practical cooperation and promote coordinated development among the relevant countries to achieve common prosperity,” she said.
In early 2017, China’s Zhejiang Hengyi Group Co Ltd, operating with a Bruneian partner as Hengyi Industries Sdn Bhd, signed an Implementation Agreement with the Energy and Industry department at the Prime Minister’s Office (EIDPMO) and the Brunei Economic Development Board (BEDB) for a USD3.5 billion integrated oil refinery and aromatic facility due to begin production in 2019.
Hengyi’s deal was one of the largest foreign investments in Brunei in recent years and brought consolidated Chinese investment worth up to around USD6 billion.
In September 2017, Hengyi Industries pledged a further USD12 billion to the second phase of the development of the Pulau Muara Besar petrochemical plant. It brought Hengyi’s total investment from the first and second phase above USD15 billion – their largest foreign investment to date.
Up until recently, bilateral economic relations between Brunei and China revolved around oil and gas, but have since grown beyond petroleum trading, with many involving significant infrastructural developments in Brunei.
In 2016, Chinese telecom operator China Telecom Global partnered with Telekom Brunei (TelBru) to expand existing local networks and significantly improve the nation’s connectivity.
In the same year, Guangxi-based Hiseaton Food Co Ltd joined with a government-linked company as Hiseaton Fisheries Sdn Bhd to establish an offshore aquaculture farm. As part of the agreement, scientists and experts from China were sent to Brunei to help form a Brunei-Chinese aquaculture research centre.
At the end of 2016, Bank of China opened its first office in Bandar Seri Begawan. China’s move into the financial industry was expected to help provide funding for Bruneian SMEs and facilitate regional trade.
Brunei’s strategic position near the geographic centre of Southeast Asia and access to the South China Sea makes it an important link in the USD1 trillion OBOR scheme. Not beset by the same political issues which have plagued neighbours Malaysia and Indonesia, Brunei is an attractive destination as an outpost for China’s regional interests.
In February 2017, Muara Port Company Sdn Bhd, a newly-formed joint venture between Beibu Gulf Port Group and Darussalam Assets Sdn Bhd, assumed control of Brunei’s largest container terminal with the intentions of developing Muara Port into a gateway in the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA).
China’s investments have been timely as Brunei’s efforts to diversify have intensified. The United States’ decision to withdraw from the Trans-Pacific Partnership (TPP) multilateral trade agreement, which Brunei had hoped would boost its prospects of economic diversification and encourage further foreign investment in key sectors such as biotechnology, agribusiness and information technology, has placed greater emphasis on the benefits of Chinese trade and investment.
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