GUANGXI: LEADING CHINA-BRUNEI COOPERATION

By Pan Yingqiu

At the 15th China-ASEAN Expo,Brunei Second Minister of Foreign Affairs and Trade Dato Seri Paduka Haji Erywan bin Pehin Datu Pekerma Jaya Haji Mohd Yusof, who led a delegation to attend the expo, illustrated how Brunei has actively supported construction of the Belt and Road. He said that Brunei has been enthusiastic about joint construction on Muara Port and the new Southern Transport Corridor, an international land-sea trade passage organically linking the Belt and Road, to strengthen cooperation with China’s Guangxi Zhuang Autonomous Region and propel Brunei-China and ASEAN-China relations to higher levels.

China and Brunei are friendly neighbors with only a narrow stretch of sea separating them. Against the backdrop of the China-ASEAN Expo,especially since the Belt and Road Initiative was proposed, cooperation and development in variousfields between the two countries has become increasingly intertwined,ushering in a new era for fastdeveloping exchange and cooperation between Guangxi and Brunei.

Brunei-Guangxi Economic Corridor

In an aim to promote cooperation with Brunei and other ASEAN countries positioned in the sea,Chinese leaders launched Pan-Beibu Gulf Economic Cooperation, which has received positive feedback and praise from Brunei’s Sultan and leaders from other related ASEAN countries. In January 2008, the Chinese government approved implementation of a Development Plan for Guangxi Beibu Gulf Economic Zone,which includes specific plans to build Guangxi Beibu Gulf Economic Zone into a base of logistics, business and trade, processing and manufacturing,as well as an information exchange center for China-ASEAN open cooperation, making the economic zone as an internationally important regional economic cooperation zone featuring economic prosperity, social harmony and a sound ecological environment.

The emergence of Pan-Beibu Gulf Economic Cooperation as a subregional cooperation platform and the open development of Guangxi Beibu Gulf Economic Zone will provide a new mechanism for Guangxi and Brunei to further consolidate friendly cooperation, attract more resources and expand space for development.

In 2014, the Brunei government and People’s Government of Guangxi Zhuang Autonomous Region signed a Memorandum of Understanding on Economic and Trade Cooperation alongthe Brunei-Guangxi Economic Corridor,agreeing to conduct comprehensive cooperation in agriculture, industry,logistics, halal food processing,health care, bio-medicine and tourism. Over the past four years,the Brunei-Guangxi Economic Corridor has evolved from concept to practice, driving economic and trade cooperation between the two sides to flourish.

Brunei Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah (second left) inspects the scale model of Zhejiang Hengyi Petrochemical Project on Pulau Muara Besar (PMB) at an exhibition hall of the 14th China-ASEAN Expo in Nanning, capital of the Guangxi Zhuang Autonomous Region in southern China, on September 11, 2017.

According to official data from Guangxi, by June 2018, Brunei has invested in a total of seven projects in Guangxi with a combined actual value of US$18.912 million primarily infields of manufacturing and real estate. At the same time, Guangxi approvedfive companies and organizations to invest in Brunei with a total contractual investment of US$88.88 million, among which the combined contractual investment of Chinese companies was US$53.48 million.

The People’s Government of the Guangxi Zhuang Autonomous Region has emphasized on several occasions during bilateral talks between China and Brunei that construction of the Brunei-Guangxi Economic Corridor is an important piece of the Belt and Road Initiative that aligns with the common interests of both Guangxi and Brunei. The promising Brunei-Guangxi Economic Corridor meets the demands of both sides to complement each other and will significantly boost integration of Guangxi’s mature manufacturing technologies, rich land and labor resources and Brunei’s Halal certification and reputable brands with an eye on the Muslim market.

Guangxi will earnestly fulfill the cooperation consensus reached by both sides, participate in and promote construction of Brunei-Guangxi Economic Corridor and follow the agreed consensus while pragmatically advancing key cooperation projects to promote Beibu Gulf Port Group’s(BGPG) involvement in operations of Muara Port, construct Nanning Brunei Agricultural Industrial Park and Yulin Brunei Traditional Chinese Medicine Industrial Park, as well as startfish farming, oyster breeding and rice planting in Brunei.

The promising Brunei-Guangxi Economic Corridor will significantly boost integration of Guangxi’s mature manufacturing technologies, rich land and labor resources and Brunei’s halal certification and reputable brands with an eye on the Muslim market.

Signing ceremony of the Memorandum of Understanding on Economic and Trade Cooperation along the Brunei-Guangxi Economic Corridor on September 17, 2014.

A container terminal of Muara Port, 29 kilometers from Seri Begawan,the capital of Brunei.

Such measures will drive Brunei-Guangxi Economic Corridor to become an innovation demonstration project of China-ASEAN cooperation and make the economic corridor a new highlight of China-Brunei cooperation.

Minister of Industry and Primary Resources of Brunei Pehin Dato Awang Haji Yahya stressed that Brunei has attached great importance to developing friendly cooperation relations with Guangxi and is optimistic about Guangxi’s pivotal role in the construction of the Belt and Road. Brunei is satisfied with the progress made on the Brunei-Guangxi Economic Corridor and will work with Guangxi to promote key projects related to the economic corridor to achieve fruitful results.

The Brunei government positively responded to the Belt and Road proposal and became one of the founding members of the Asian Infrastructure Investment Bank (AIIB), with an aim to propel Brunei’s economic diversification.

Huge Potential for Production Capacity Cooperation

For years, oil and natural gas exporting has been the backbone of the national economy of Brunei.However, as oil and natural gas prices in the international market have plunged in recent years alongside the gradual decline of domestic oil and gas reserves, the Brunei government is hoping to transform the singular economic model which is too reliant on oil and gas exports to make it more diversified. Production capacity cooperation under the framework of China’s Belt and Road has brought new development opportunities for Brunei, and the potential for production capacity cooperation between the two countries is huge.

The main objective of Brunei Vision 2035 is to promote economic diversification via methods such as extending the oil and gas industry chain while vigorously developing import substitution industry, export processing industry, agriculture,fisheries, tourism, thefinancial sector and the information service industry.China’s Belt and Road Initiative aligns greatly with the objectives of Brunei Vision 2035. The Brunei government positively responded to the Belt and Road proposal and became one of the founding members of the Asian Infrastructure Investment Bank(AIIB), with an aim to propel Brunei’s economic diversification.

In recent years, economic and trade cooperation between China and Brunei has developed fast. China’s direct investment in Brunei has increased dramatically.Chinese companies such as Huawei Technologies Co., Ltd., Beijing Tong Ren Tang (TRT), and Zhejiang Hengyi Group Co., Ltd. opened branches in Brunei successively. The two countries have also actively conducted manpower cooperation, and Chinese foreign aid volunteers have been widely praised in Brunei. Meanwhile,driven by the Brunei-Guangxi Economic Corridor, cooperation in economics, trade and production capacity between the two countries has taken shape.

In order to make up for inadequacy in production capacity and raw materials, Brunei welcomes the entry of Chinese capital, technologies and enterprises, and Bruneian entrepreneurs even come to China to look for business partners and attract investment.

Currently, China and Brunei are conducting international production capacity cooperation in two majorfields: the petrochemical industry represented by Zhejiang Hengyi’s petrochemical project, through which China hopes to establish a cross-border economic and tradecooperation zone with Brunei, and halal farming represented by the Brunei-Guangxi Economic Corridor.Brunei enjoys a sound reputation in the Muslim world thanks to its strict industrial standards for halal food and drugs, but it lacks raw materials,technology and production capacity to become a world leader in halal industries. Chinese companies carry out rice planting, oyster breeding andfish farming in Brunei, which requires them to bring Chinese capital, technologies and production capacity to the country, as they provide rice and aquatic products for Brunei, China and the wider region.

Brunei enjoys a good natural environment, where China’s production capacity for rice planting and aquaculture can be fully tapped and radiate throughout the East ASEAN Growth Area(EAGA) consisting of Malaysia, the Philippines, Indonesia and Brunei.Not only can Brunei promote its own development through production capacity cooperation with China,but the move will also make Brunei an EAGA hub of production, trade,processing and logistics, driving cooperation in the EAGA sub-region for win-win results.

Promising Prospects

In order to dock with the 21st-Century Maritime Silk Road and eliminate reliance on oil and gas exporting to promote economic diversification, Brunei is making efforts to improve competitiveness and economic development sustainability, seeking cooperation with China’s ports to expand maritime connectivity and strengthen maritime development as it participates in joint construction of the 21st-Century Maritime Silk Road.

In recent years, the Brunei government has encouraged global shipping companies to conduct cargo entrepot trade via Muara Port located in Daerah Brunei Muara—the only deep water port in the country. In 2015, Brunei’s Ministry of Communications singed a letter of intent with BGPG, and in 2016 it only took six months for BGPG and its Brunei partner to complete a preparatory process on Muara Port involving thorough research before making a development plan and a joint venture contract as well as company registration.

In February 2017, a joint venture was established in Bandar Seri Begawan between Guangxi Beibu Gulf International Port Group and Darussalam Assets, which was officially appointed as the new operator of Muara Container Terminal(MCT).

So far, the production and operations of the MCT has been running smoothly. In thefirst half of 2018, the total container throughput of Muara Port was 56,400 twenty-feet equivalent units (TEUs), increasing 5.75 percent year-on-year.

The joint venture operation of the MCT signaled smooth landing of a flagship project of the Brunei-Guangxi Economic Corridor and evidenced unprecedentedly efficient cooperation between the two sides.

Pehin Dato Awang Haji Yahya declared, “We pay special attention to Guangxi because we hope both Brunei and Guangxi can benefit from strengthened economic cooperation to improve Brunei-China relations comprehensively.” He has remarked on several occasions that Brunei plans to make Qinzhou Port in Guangxi an important gateway to the Chinese market and hopes to further promote cooperation in agriculture andfisheries with China.

“Brunei will explore any possible port cooperation between the two countries,” stressed the minister,explaining that Brunei’s economy and export diversification has reached a crucial crossroads. Now,the economy of Brunei heavily relies on oil and natural gas, which accounts for 67 percent of Brunei’s gross domestic product, 90 percent of the total tax revenue of Brunei government and 96 percent of total exports. But the oil and gas industry only accounts for 5 percent of employment. He emphasized that Brunei needs to create an economic model featuring dynamic and sustainable development for the generations to come.

Chen Wu, chairman of Guangxi Zhuang Autonomous Region,concurred that the Brunei-Guangxi Economic Corridor is a important component of the Belt and Road. As a window for China’s openness at the forefront of cooperation with ASEAN,Guangxi plays a unique and pivotal role in friendly cooperation between China and Brunei.