BANDAR SERI BEGAWAN – Brunei and China have agreed to ramp up cooperation in infrastructure development as part of Beijing’s ambitious Belt and Road Initiative (BRI), with the sultanate saying it would welcome more investment from China to help diversify its oil-dependent economy.

His Majesty Sultan Haji Hassanal Bolkiah on Monday welcomed Chinese President Xi Jinping to Istana Nurul Iman for bilateral talks — the first Chinese president to visit the country in 13 years — saying it was an opportunity to “renew friendships and relations that can be traced as far back as the fifteenth century.”

The two countries signed a memorandum of understanding “to support and jointly promote cooperation in the Belt and Road Initiative”, according to a joint statement issued after the meeting.

While no new projects or FDI was announced, both sides said they would push forward cooperation on the Hengyi Industries refinery and petrochemical plant on Pulau Muara Besar, a US$15 billion joint venture that will start production next year in a boost to Brunei’s export markets.

During the meeting, Xi reiterated China’s support for sustainable economic development in Brunei, as the country slowly emerges from four years of recession.

The sultan and the president also agreed to further promote trade in agriculture, halal food, and aquaculture through the Brunei-Guangxi Economic Corridor, after two-way trade hit US$1 billion last year — an increase of 36.5 percent.

Projects under the corridor include the expansion of Muara Port, the Nanning-Brunei agricultural park, the Yulin-Brunei Chinese medicine park, as well as land development for rice farming and aquaculture.

The two sides said they will also “jointly uphold multilateralism and resist protectionism” and voiced support for the World Trade Organization, after a testy APEC summit which saw sharp disagreements between the US and China over global trade.

Infrastructure drive

Like in many other parts of Asia, Chinese companies are investing huge sums in Brunei as part of an infrastructure drive aimed at extending Beijing’s economic and geopolitical clout.

The World Bank estimates that BRI-funded infrastructure could boost trade among countries involved by 3.6 percent, and global trade some 2.4 percent. But analysts have also warned of the risks to already debt-burdened economies.

While several Chinese firms are already involved in major infrastructure projects in Brunei — from the Temburong Bridge and Ulu Tutong Dam, to the Telisai-Lumut Highway — all these projects were financed by the Brunei government without borrowing Chinese funds.

A second MOU was also signed Monday establish a joint steering committee to facilitate more frequent consultations at the ministerial level.

China’s foreign minister Wang Yi (L) and Brunei’s second foreign minister sign an MOU at Istana Nurul Iman, establishing a joint steering committee. Photo: Infofoto

South China Sea

In the joint statement, His Majesty and President Xi both stated their “mutual respect for sovereignty, territorial integrity, and non-interference in each other’s internal affairs”, noting that tensions between ASEAN members and China over the South China Sea had eased.

Both countries have overlapping territorial claims in the South China Sea, with Beijing’s nine-dash line encroaching on Brunei’s exclusive economic zone. The leaders agreed that territorial disputes should be resolved “by sovereign states directly concerned”.

HM the Sultan of Brunei hosts a state luncheon at Istana Nurul Iman in honour of the state visit of Chinese President Xi Jinping. Photo: Infofoto

The leaders also said they would to support joint development of maritime oil and gas resources based on “mutual respect, equality and mutual benefit” and in accordance with international law.

However, they noted that any cooperation “shall not be interpreted as to prejudice the position of the respective countries in relation to maritime rights and interest”.

“We need to enhance mutual political trust,” Xi said in an op-ed published in Brunei media. “To take our relations to new heights, our two sides need to plan the development of China-Brunei relations from a long-term, strategic perspective.”

The president left Brunei on Tuesday morning, continuing his diplomatic tour to the Philippines.