China’s Xi offers more investment in South China Sea claimant Brunei. President Xi Jinping praised China’s relations with the tiny nation of Brunei, which have been focused more on economic issues than territorial conflicts in the South China Sea. During his speech, President Xi Jinping offered to buy more items from Brunei and stimulate investment in the Islamic sultanate.
According to Chinese state media, President Xi Jinping said on Thursday in San Francisco, during a meeting with Brunei’s Sultan Hassanal Bolkiah, that China would welcome more exports from Brunei, tell more Chinese enterprises to set up shop in the Southeast Asian country, and expand cooperation in areas such as food security. The meeting took place during Xi’s visit to the United States.
Brunei has staked a claim to a portion of the South China Sea, but China maintains ownership of most of the waterway. However, in contrast to some of its more outspoken neighbors who also have claims in the region, Brunei has been mute on its claim to a relatively tiny territory off the coast of northern Borneo. Instead, the oil-dependent nation has focused on expanding its trading links with China to diversify its economy.
During a meeting on the sidelines of the APEC summit in San Francisco, Xi urged the sultan of Brunei that “both sides should work together to promote positive progress in joint maritime development and jointly safeguard peace and stability in the South China Sea.” Xi was speaking to the monarch in the context of the APEC conference.
According to Xi, China is eager to collaborate with Brunei and other ASEAN states to ensure that cooperation in East Asia continues to go on the “correct” path.
Brunei has listed China as one of its largest foreign investors and an essential factor in its efforts to establish a more diversified economy. The country’s crude oil reserves will likely be completely depleted in a few decades. Brunei has counted China as one of its largest foreign investors.
China’s most significant investment to date is an oil refinery that costs several billions of dollars.
Zhejiang Hengyi Petrochemical, based in China, is a shareholder in the Pula Muara Besar refinery, which was established in 2019 as a joint venture between the government of Brunei and Zhejiang Hengyi Petrochemical.
The initial investment made by Hengyi was around $3.45 billion. After that, it made an additional investment of $13.65 billion to increase the facility’s refining capacity and construct more petrochemical facilities.
The International Monetary Fund has projected that Brunei’s GDP will fall by around one percent this year due to decreased energy output brought on by infrastructure repairs.