COOPERATING CLOSER Deepening relations between China and Brunei have driven bilateral trade and investment to grow rapidly

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The Brunei booth in the“City of Charm”exhibition area of the 16th China-ASEAN Expo,which kicked offon September 21,2019 at the Nanning International Convention and Exhibition Center in Nanning,Guangxi.

“It is important that both governments continue to cooperate on facilitating trade between the two countries,”stated Dato Dr.Abdul Manaf Metussin,Deputy Minister of Finance and Economy of Brunei,in a written interview conducted by China Report ASEAN.“China continues to be one of Brunei’s top trading partners and maintains a strong presence in Brunei through established joint ventures between local and Chinese companies in various sectors.”

“We know Brunei has the potential to be the base for Chinese products entering ASEAN as well as Borneo region,and Guangxi could play a reciprocal role in the region’s export back to China and beyond,”he continued.

The deepening relations between China and Brunei in recent years have driven bilateral trade and investment to grow rapidly.In 2018,trade volume between Brunei and China reached US$1.8 billion,an 86 percent increase from the previous year.“That growth is faster than that between China and any other ASEAN country,”noted Chinese Ambassador to Brunei Yu Hong.

Brunei sees Chinese companies playing a role in efforts to diversify its economy and improve infrastructure.Before his state visit to Brunei last November,Chinese President Xi Jinping stated in an open letter published in local newspapers that increasing numbers of Chinese companies were making investments and doing business in Brunei,contributing to the diversification of its economy.

Tourism Prospects

Tourism has become a developmental priority for the Bruneian government in recent years.Boasting beautiful landscapes,impressive architecture and friendly people,Brunei has long been a wonderful place to visit.

In 2018,Brunei’s international tourist air arrivals hit historical highs thanks in large part to support from Chinese visitors,according to statistics from the Tourism Development Department under the Ministry of Primary Resources and Tourism.China became Brunei’s biggest source of foreign tourist arrivals in 2018.Chinese tourists made up 23.6 percent of visitors to Brunei passing through the Brunei International Airport,up from 20.9 percent in 2017.

The spike in tourism is due in large part to promotion from the two governments.China and Brunei signed Memorandum of Understanding (MoU) on the Implementation Plan for Outbound Travel by Chinese Citizens at Their Own Expense to Brunei Darussalam in 2000 and MoU on Tourism Cooperation in 2006.Since July 2003,China has granted visa-free 15-day visits to Brunei citizens who travel to China with ordinary passports for sightseeing or business.Since May 2016,Brunei has offered visas upon arrival to Chinese citizens.

Resumption of direct flights between Bandar Seri Begawan and Beijing will also stimulate tourism cooperation.On October 27,2019,Brunei Royal Airlines (RB),Brunei’s national carrier,reintroduced a regular flight between the two capitals.RB originally launched the route in 1993,but it was grounded due to poor passenger flow.Before Beijing,RB already offered direct flights to Shanghai,Haikou,Nanning,Hangzhou and Changsha.The new plan adds three flights to Beijing per week.“Beijing is a huge opportunity for us to serve one of the fastest-growing markets in the world,which drove our plan to increase daily flights by Chinese New Year 2020,”declared RB CEO Karam Chand.

“We have invested a lot to launch a Chinese language website and are introducing both AliPay and WeChat as payment options for our guests,”he added.“These new solutions are available effective today.We are doing everything we can to ensure Brunei and RB information is readily available and the booking process is seamless for all our guests.”

In 2020,both countries will celebrate China-Brunei Year of Tourism,so Brunei is likely to welcome even more Chinese visitors.Yu Hong revealed that both sides are conducting close communication to arrange activities for the celebration.By scheduling these activities in the Year of Tourism,the ambassador hopes that peopleto-people exchange between the two countries will be further elevated.

On September 18,2015,the Brunei government and the Guangxi Beibu Gulf International Port Group sign a letter of intent on cooperation,planning to make Brunei a shipping hub for ASEAN and the East ASEAN Growth Area.

Agricultural Cooperation

Aquaculture is an important field for bilateral agricultural cooperation.Brunei possesses good conditions for aquaculture:rich fishery resources,a 161-km-long coastline,stable year-round temperature and clean sea water.Brunei is safe from typhoons,earthquakes and other natural disasters.The coastal mangrove area is a perfect breeding ground for shrimp and fry.

Brunei blue shrimp is quite popular among Chinese consumers.The variety is farmed widely in the clean waters of Brunei.Because regulations allow only 10 to 15 shrimp per square meter of water,Brunei blue shrimp is revered as the happiest in the world.

In March 2019,JD.com,one of China’s largest online retailers,and Pure Fresh International Holdings Ltd introduced an overseas aquatic breeding base in Bandar Seri Begawan as the largest offshore farming project in Brunei.The base has plans to expand 10-fold within two years,mainly breeding blue shrimp and groupers.

Pure Fresh has invested more than US$10 million and created a 1,200-square-meter aquatic processing park about three kilometers from the Port of Muara,the largest port in Brunei.When a batch of fresh blue shrimp are caught on the shore,they are transported to the park.After a routine procedure involving cleaning,disinfection,sorting and freezing,they are transferred to the cold chain cabinets.When they pass official inspection of Brunei,they are shipped to China and paired with Chinese consumers through JD.com.

In 2018,trade volume between Brunei and China reached US$1.8 billion,an 86 percent increase from the previous year.

China became Brunei’s biggest source of foreign tourist arrivals in 2018.Chinese tourists made up 23.6 percent of visitors to Brunei passing through the Brunei International Airport,up from 20.9 percent in 2017.

Before Pure Fresh,other Chinese companies had ventured to Brunei to do business.Among them was Guangxi Haishitong Food Co.,Ltd.,an early Chinese investor in Brunei.Its project was considered the first of the Guangxi-Brunei Economic Corridor,which created Brunei’s first large-scale fishing brand of deep-sea cage aquaculture.At the 14th China ASEAN Expo in 2017,Sultan of Brunei Hassanal Bolkiah gave his full support to the company’s participation in the exhibition as a representative brand of Brunei.He even visited the company’s booth in person.

Haishitong is now capable of processing 20,000 tons of aquatic products annually.The deep-sea fish produced by the company were served at a state banquet of Brunei last November.With more Chinese capital,equipment and technology reaching Brunei,the potential for cooperation between the two countries in fishery production is expanding.

On June 25,2019,Brunei and China signed a protocol agreement on wild aquatic products exported from Brunei to China to promote healthy development of trade in agriculture,forestry and water products.Statistics from Brunei’s Department of Fisheries showed that aquatic product exports have increased from 1,209 tons in 2017 to 1,763 tons in 2018,34 percent of which went to China.Haji Ali,Minister of Primary Resources and Tourism of Brunei,affirmed that China is the main export market for Bruneian aquatic products and stressed that signing the protocol would strengthen cooperation between the two countries in the fields of biosafety,inspection and quarantine of wild aquatic products.He considers the protocol conducive to the expansion of economic and trade cooperation between the two countries in the fields of agriculture,forestry and water products.

A Brunei woman displays her handicrafts at the 2015 China-ASEAN Expo Tourism Exhibition held in Guilin,Guangxi.

Dato Hj Ali(fourth right,front),Minister of Primary Resources and Tourism of Brunei,inspects a paddy site in Belait District on July 18,2019.

“The Protocol on Wild Aquatic Products will facilitate export of seafood to China,”explained Manaf Metussin.“As our trade expands,we trust Bruneian companies will also be able to use existing platforms including e-commerce to reach more of the Chinese market.”

Alongside aquaculture cooperation,halal food is another field with potential.Halal food is an advantageous industry of Brunei and a pillar industry that the Brunei government is striving to build.Strengthening and expanding the halal food industry is greatly significant to the country’s economic diversification.By signing an MoU to build the Guangxi-Brunei Economic Corridor in 2014,both sides agreed to strengthen cooperation including in the field of halal food processing.Based on the MoU,China(Guangxi)-Brunei Agricultural Industrial Park was designated for Nanning,of which 20 hectares is now devoted to halal food production.

Brunei has a complete and strict certification mechanism for halal food that is recognized by most Muslim countries.China’s vast land and resources can supply raw materials for Brunei’s production of halal food and medicine.China’s Muslim population is about 30 million,mostly in the northwestern regions of Xinjiang,Gansu,Ningxia and Qinghai.Because of the strict ingredient and production standards,halal food is also popular with many non-Muslim consumers.The large market potential is attractive for both sides.

Furthermore,China has helped Brunei improve its self-sufficiency in agriculture.The Brunei government has implemented many tactics to boost agricultural output to meet local needs and export quotas.According to official data,the Sultanate imported 30,631 tons of rice in 2017,and the local supply contributed only 4.75 percent of total consumption.The government is aiming to raise that number to 10 percent by 2020.

In 2017,Brunei’s Ministry of Primary Resources and Tourism and China’s Yuan Longping High-Tech Agriculture Co.,Ltd.signed an MoU on cooperation in agriculture.The MoU covers cooperation in agricultural science and technology in areas such as advanced breeding,seed production and cultivation technologies.Traditional paddy varieties planted in Brunei yield up to 2 tons per hectare each season.High-yield varieties cultivated in China could increase the output to nine tons,and production efficiency is expected to increase to 12 tons in the future.

Large Projects

Statistics from Brunei’s Department of Fisheries showed that aquatic product exports have increased from 1,209 tons in 2017 to 1,763 tons in 2018,34 percent of which went to China.

According to official data,the Sultanate imported 30,631 tons of rice in 2017,and the local supply contributed only 4.75 percent of total consumption.The government is aiming to raise that number to 10 percent by 2020.

An important country on the 21st Century Maritime Silk Road,Brunei is attracting more and more Chinese investment.Chinese companies are recognizing the business opportunities in Brunei. Through cooperation with local enterprises,they provide advanced technology and managerial experience,enhancing Brunei’s economic and social development.

Muara Port is the only deep-water port in Brunei and the main hub for Brunei’s international trade.In addition to oil and gas resources,90 percent of Brunei’s imported and exported goods pass through the port.However,due to outdated management,the unique potential of the port has not yet been optimally leveraged.

In February 2017,upon an invitation from the Brunei government,Guangxi Beibu Gulf Port Group and Brunei Darussalam Asset Management Co.,Ltd.established the joint venture Muara Port Company(MPC) to renovate the port.After taking over the port,the company has upgraded the equipment and introduced cutting-edge information management.Operational efficiency has been significantly improved.

“Average vessel operation rate has increased over 47 percent compared to before we took over,”beamed Zhong Kunyu,vice general manager of MPC.“Another indicator,average haulier turnaround time has been cut by over 50 percent.”

According to data from MPC,general cargo capacity rose from 349,918 tons in 2014 to 735,183 tons in 2018.The company aims to complete the system by perfecting software.According to Zhong,they introduced a training program for local employees to learn about relevant technology.“Now about 90 percent of the employees of our company are locals,”Zhong noted.“We hope this number will continue to rise.”

The Tumburong Bridge project,which is expected to open to traffic early next year,is also receiving much attention.Brunei’s territory is divided into two parts by Limbang,a city of Malaysia.Travelers must pass through several immigration checkpoints involving border entry and exit procedures.The 30-kilometer cross-sea bridge will bypass these checkpoints and connect the two separate parts,cutting travel time from two hours to only 45 minutes.

The bridge is being built by Chinese state-owned China State Construction Engineering Corporation(CSCEC) and South Korean company Daelim.The CSCEC is overseeing construction of 12-km land viaducts through the rainforest.In dense rainforests and alongside tropical swamps,employees from China,Bangladesh and Southeast Asian countries battle scorching temperatures and high humidity as they work one of three daily shifts across 18 hours to ensure the bridge project is completed as planned.Upon completion,the bridge will become the longest in Southeast Asia,overtaking the Second Penang Bridge in Malaysia.

In addition to all these projects,Chinese companies have also become involved in construction of other landmark infrastructure projects in Brunei such as the Pulau Muara Besar Bridge,Telisai-Lumut Highway and Ulu Tutong Dam,and their presence has been warmly welcomed locally.