Sultan Hassanal Bolkiah looks to Beijing for succor as his nation's oil and gas reserves run dry
Brunei's ruler, Sultan Hassanal Bolkiah, is in a race against time as his nation’s once deep stores of oil and gas rapidly run dry. While other foreign investors up stakes, China is giving the Southeast Asian sultanate a new lease on economic life.
International banks such as HSBC and Citibank have recently ceased operations in Brunei in sight of its contracting oil and gas business, driven down by years of depressed global energy prices. But one major financial institution has filled the vacuum: Bank of China (BOC).
BOC established a branch in Brunei in 2016 to facilitate Beijing’s foreign direct investments. Yang Jian, China’s ambassador to Brunei, last year described the sultanate as an important node in the US$1 trillion Belt and Road Initiative (BRI), President Xi Jinping’s signature continental and maritime infrastructure development initiative.
Some observers believe China intends to leverage its major investments and close political ties with Brunei’s ruler to sway the country’s stance on territorial disputes in the South China Sea, where the sultanate is also a rival claimant. That, they say, would deter other Southeast Asian claimants from reaching consensus on the issue.
“China is placing huge pressure on Brunei to concede ‘joint development’ in its exclusive economic zone (EEZ). These are rights that clearly belong to Brunei by any reading of the UN Convention on the Law of the Sea (UNCLOS),” says Bill Hayton, associate fellow at the Asia-Pacific Program at Chatham House.
Nile Bowie is a writer and journalist with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.
Brunei's ruler, Sultan Hassanal Bolkiah, is in a race against time as his nation’s once deep stores of oil and gas rapidly run dry. While other foreign investors up stakes, China is giving the Southeast Asian sultanate a new lease on economic life.
International banks such as HSBC and Citibank have recently ceased operations in Brunei in sight of its contracting oil and gas business, driven down by years of depressed global energy prices. But one major financial institution has filled the vacuum: Bank of China (BOC).
BOC established a branch in Brunei in 2016 to facilitate Beijing’s foreign direct investments. Yang Jian, China’s ambassador to Brunei, last year described the sultanate as an important node in the US$1 trillion Belt and Road Initiative (BRI), President Xi Jinping’s signature continental and maritime infrastructure development initiative.
Some observers believe China intends to leverage its major investments and close political ties with Brunei’s ruler to sway the country’s stance on territorial disputes in the South China Sea, where the sultanate is also a rival claimant. That, they say, would deter other Southeast Asian claimants from reaching consensus on the issue.
“China is placing huge pressure on Brunei to concede ‘joint development’ in its exclusive economic zone (EEZ). These are rights that clearly belong to Brunei by any reading of the UN Convention on the Law of the Sea (UNCLOS),” says Bill Hayton, associate fellow at the Asia-Pacific Program at Chatham House.
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