When Chinese President Hu Jintao met Brunei's Sultan Hassanal Bolkiah on
the sidelines of the Asia-Pacific Economic Cooperation (APEC) meeting this
September in Russia, both leaders said they were pleased with the development
of bilateral ties in recent years.
Though relations between Beijing
and Bandar Seri Begawan have strengthened considerably over the past few years,
the future could pose challenges that both sides will have to navigate in order
to preserve these close ties.
Sino-Brunei relations are deeply
rooted in history and date back over 2,000 years. The two sides traded as early
as China's Western Han Dynasty, and some accounts suggest Chinese settlers from
Fujian province arrived in Borneo and settled in the area now called Brunei in
the 13th and 14th centuries.
Brunei's Sultan Abdul Majid
Hassan, who died during his travels in China in the early 15th century despite
the Chinese emperor's best efforts to help treat his illness, was buried with
royal tribute in Nanjing and continues to serve as a symbol of the relationship
today.
In more recent times, however,
relations were somewhat distant as Brunei was a British protectorate for most
of the last century until it gained independence in 1983. Even then, due to
various concerns including communism and sensitivities related to its ethnic
Chinese population, Brunei on September 30, 1991, was then the last member of
the Association of Southeast Asian Nations (ASEAN) to establish official ties
with Beijing.
Since then, China increasingly
has seen Brunei as a useful source of oil and gas to fuel its economic growth
and a voice for better ties between it and ASEAN. Meanwhile, Brunei, an Islamic
sultanate with a population of 400,000 and the fifth-richest country in the
world per capita, has considered Beijing to be a crucial partner to engage to
both diversify and strengthen its fossil-fuel-based economy and preserve peace
and stability in the Asia-Pacific region.
While relations between the two
countries have tightened over the last decade or so, the last year has seen a
particular increase in the momentum of the relationship ahead of Brunei's
chairmanship of ASEAN in 2013.
Last November, Wen Jiabao became
the first Chinese premier to visit Brunei in the history of the bilateral
relationship, and both sides celebrated the 20th anniversary of the
establishment of diplomatic relations with great fanfare. Wen's visit began
what the Brunei Times called "a whole new chapter" in Sino-Brunei
relations.
This year, the chairman of the
Chinese People's Political Consultative Conference (CPPCC) Jia Qinglin paid the
first visit of its kind to Brunei in April, and Chinese Foreign Minister Yang
Jiechi also visited in August. Top officials also have met on the sidelines of
key meetings, as Chinese President Hu Jintao and Brunei's Sultan Hassanal
Bolkiah most recently did at APEC.
Commercial relations have
strengthened considerably, as well. Trade in 2011 soared to US$1.3 billion,
nearly four times what it was in 2008 and surpassing the $1 billion target
previously set by the two countries. The bulk of that is in energy, which is
not surprising since Beijing needs to fuel its rapid growth while Brunei is
Southeast Asia's third-largest oil exporter and the world's fourth-largest
natural gas exporter.
Soon after Wen's visit to Brunei
in 2011, for example, Brunei agreed to increase oil exports to China from
13,000 barrels per day to 16,000 barrels per day. Meanwhile, China's National
Offshore Oil Corp has inked a deal with Petroleum Brunei for oil and gas
commercial exploration, while Zhejiang Henyi Group and Sinopec Engineering Inc
are working to help develop an oil refinery and aromatic cracker plant in
Brunei to boost the energy sector in the largest ever foreign direct investment
in the country.
Both sides increasingly have
tried to broaden the reach of their cooperation beyond energy. Within the
economic realm, the two countries signed a Memorandum of Understanding (MoU) to
boost cooperation in agriculture in April. Apart from increased trade, the MoU
also included more joint efforts in human resource development and providing
training for government officials and professional technical personnel.
Both sides have tried to
encourage greater investment and private sector interaction. Beijing has
signaled that it would like small and medium-sized enterprises from Brunei to
invest in "lesser developed" parts of China, while Bandar Seri
Begawan has tried to get Beijing to broaden its range of investments in the
country through a range of trade fairs, expositions and symposiums.
A recent National Chamber of
Commerce and Industry meeting in Brunei, for instance, saw a Chinese delegation
comprising government representatives from various industries including real
estate, construction, medicine, and gem and jade. Cooperation also has been
recently extended to the city level, with Nanjing and Bandar Seri Begawan
becoming sister cities last year - an arrangement that is expected to boost
tourism and cultural activities.
China and Brunei also continue to
place a great emphasis on people-to-people ties, which CPPCC chairman Jia
Qinglin singled out as one of the four ways to enhance bilateral cooperation
during his visit earlier this year. For Brunei, the main focus is on tourism
because aside from its ASEAN neighbors, China brings the most tourists into
Brunei.
Beijing and Bandar Seri Begawan
have also both been paying increasing attention to the role of youth in
bilateral ties. Chinese youth groups have paid visits to Brunei, and the
Universiti Brunei Darussalam and Zhejiang University forged an official
partnership in July this year, initiatives that not only cement
inter-generational ties between the two nations, but also potentially could
provide Brunei with young investors or graduates interested in working or doing
business there.
The ceremonial dimension of
people-to-people ties also should not be overlooked. China continues to invest
a great deal in emphasizing the rich history of the relationship, promoting the
China-Brunei Friendship Hall completed in 2006 and the Brunei Heritage Garden
unveiled in 2008 - both of which are located in Nanjing where the former Brunei
sultan is buried. For Brunei's part, the Brunei-China Friendship Association
founded in 2006 continues to promote ties through events including cultural
exchanges and exhibits.
Yet, despite the great strides in
Sino-Brunei relations over the past few years, the relationship still has its
limits, which could pose challenges for both sides in the coming years. First
and most obviously, China is only one of Brunei's key partners, and the
sultanate has boosted its relationships with a wide variety of actors over the
past few years ranging from the United States and the European Union to the its
ASEAN neighbors and Russia in order to diversify its options.
While this is natural, it is a
tricky balancing act to maintain, particularly for a very small country that is
trying to manage ties with much larger powers and is acutely sensitive to fears
of entrapment or abandonment.
What would happen if, for
instance, tensions between Washington and Beijing should increase in the
Asia-Pacific in the future? Bandar Seri Begawan would find itself in the middle
of a great power rivalry and potentially have to choose sides, which could pose
challenges for its diversification strategy. Neither the United States nor
China would like being spurned, and Beijing in particular has demonstrated its
tendency to use economic coercion in certain circumstances to make its
displeasure known. [1]
Second, Brunei's preferred
low-key approach to dealing with contentious issues may be challenged as it
assumes a very public role as ASEAN chair in 2013, at a crucial time for the
organization. The country has a long tradition of avoiding confrontation and
trying to resolve differences peacefully with mutual respect and consensus as
embodied in the approach of its foreign minister, Prince Mohamed Bolkiah. [2]
For instance, despite having a
sovereignty claim over the Louisa Reef, a small atoll in the South China Sea
that overlaps with Chinese (and Malaysian) claims, the sultanate has not
occupied any of the territory and tends to downplay the issue with Beijing by
focusing on multilateral mechanisms for dispute resolution and joint
development.
Similarly, at the ASEAN
deliberations in July this year that were hosted by Cambodia and infamously
produced no joint communique because of differences over the South China Sea,
Brunei simply said it would be "guided by" the decision of the ASEAN
chair. This contrasts with the other Southeast Asian compatriots and South
China Sea claimants that insisted on a reference to the dispute. [3]
As the ASEAN chair next year,
Brunei will not have the luxury of simply deferring to other countries or
remaining neutral on what to do about the South China Sea question. While it
may be tempted to once again downplay or sidestep the issue to avoid angering
Beijing, doing so may risk undermining ASEAN unity as Vietnam, the Philippines
and other members may want a tougher line.
Third, fundamental domestic
challenges also exist for both sides further down the road that could affect
ties. For Brunei, it needs to make a difficult transition away from its deep
reliance on fossil fuels, which now account for more than 60% of the economy
and 95% of export revenues, that are expected to run out in the next two to
three decades.
While the government realizes
this transition needs to occur and has had its fair share of successes - like
in alternative energy sources - the shift required is a dramatic one. This
shift entails not only a realignment of economic incentives and priorities but
also possibly changing the very relationship between state and society.
The path is not without its risks
for Sino-Brunei relations as Chinese interest in the sultanate may ebb as its
oil and gas reserves decline or Brunei may itself face domestic hiccups down
the road that constrain its ability to act effectively in the international
arena. China also faces its own transition and will need to both reorient its
economy and renegotiate its social contract domestically while taking on
greater responsibilities internationally in line with its growing power.
With the growing breadth and
depth of relationships and roles that Beijing will have in the coming years,
there is the possibility that tiny Brunei increasingly may be out of China's
radar, particularly if the sultanate's economic and geopolitical significance
also declines.
When Premier Wen delivered a
speech at Universiti Brunei Darussalam during his visit there last November, he
praised Sino-Brunei relations as developing smoothly based on mutual respect
and equal treatment, and added that he was "fully confident of the future
development of bilateral ties".
While the significant progress
the relationship has made over the past few years is cause for optimism, the
potential challenges of today and the decades ahead may certainly put that
prediction to the test.
Notes
1. For specific examples and a
broader discussion of this, see, Bonnie Glaser "China's Coercive Economic
Diplomacy: A New and Worrying Trend," Center for Strategic and
International Studies, August 6, 2012. 2. Carlyle A Thayer, "Background
Briefing: Brunei: National Security Outlook," Thayer Consultancy, August
22, 2011. 3. Carlyle A Thayer. "ASEAN's Code of Conduct in the South China
Sea: A Litmus Test for Community-Building?" The Asia-Pacific Journal, Vol.
10, Issue 34, No. 4, August 20, 2012.
Prashanth Parameswaran
Business & Investment Opportunities
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