On the eve of a joint military exercise on February 10 launched by the U.S., Japan and France in the Philippine Sea, China issued a joint statement with Brunei, which also claims rights to oil and gas exploration in the South China Sea, vowing to expand economic cooperation and deepen their strategic partnership.
Analysts said the move shows Beijing is preparing for a potential military conflict in the Taiwan Strait and to diversify its energy exports. While it could make it harder for ASEAN members to unite against China’s actions in the South China Sea, democratic countries led by the U.S. could look to strengthen security cooperation with ASEAN nations, including Brunei, they say.
Oil and gas exploration in disputed waters
The U.S. Navy’s Vinson Carrier Strike Group, the French Charles de Gaulle Carrier Strike Group, and the Japan Maritime Self-Defense Force’s Izumo-class aircraft carrier Kaga began “Exercise Pacific Steller 2025″ in the Philippine Sea east of the Philippines on Monday (Feb. 10).
The U.S. Navy’s Seventh Fleet said that the joint exercise with the world’s most advanced naval forces highlights the growing strategic importance of the Indo-Pacific region.
The exercise, although held in the eastern Philippines, was obviously aimed at China, given the recent escalation of sovereignty disputes between China and the Philippines over the South China Sea, and a strongly worded statement from U.S. and Japanese leaders after their Washington summit condemning China’s actions.
However, just before the joint exercise, Sultan Hassanal Bolkiah Muiz’zaddin Wad’daulah of Brunei made a state visit to China from February 5-7, holding talks with Chinese President Xi Jinping and signing cooperation agreements in several areas, including law enforcement, trade and the media.
The two sides will further “synergize development strategies and deepen high-quality Belt and Road cooperation, by strengthening economic partnerships, including through the Brunei-Guangxi Economic Corridor and promoting quality foreign direct investments in key sectors, and advance the strategic cooperative partnership towards a China–Brunei community with a shared future," according to a joint statement.
China and Brunei also agreed to support their respective countries' enterprises to cooperate on a commercial basis in the areas of maritime oil and gas resources, in accordance with the 1982 United Nations Convention on the Law of the Sea and following the principles of mutual respect, equality and mutual benefit.
The two countries also reaffirmed their commitment towards the full and effective implementation of the Declaration on the Conduct of Parties in the South China Sea (DOC) and finalizing an effective and substantive Code of Conduct in the South China Sea, in accordance with international law, including 1982 UNCLOS.
Multiple strategic considerations
Huang Tsung-ting, an associate researcher at Taiwan’s Institute for National Defense and Security Research Institute, said China’s decision to collaborate with Brunei on oil and gas exploration comes as no surprise.
During a visit by Chinese Vice President Han Zheng to Brunei last year, the two countries stepped up a number of cooperation initiatives, including in trade and fisheries, with energy projects being a key focus of the discussions, Huang said.
On one hand, China wants to demonstrate its influence in the South China Sea to coincide with the joint military exercises by the U.S., Japan, and France, and on the other, it’s looking to boost bilateral cooperation with neighboring countries in the South China Sea to contain Taiwan and prepare for any military action in the future, Huang said.
“Every country is considering the various scenarios around a possible conflict in the Taiwan Strait, and is making plans accordingly. China believes that it needs to strengthen cooperation with Brunei and other energy-exporting countries before a conflict occurs, ”Huang told Voice of America. “While ensuring normal economic relations with Brunei, China may want to cut off Taiwan’s natural gas supply in the event of a war, as the island imports more than half of its natural gas from Brunei’s neighbors.”
Brunei, one of the ASEAN members, has rich oil and gas reserves, and its highly developed oil and gas exploration industry has generated considerable income for the country, bringing its per capita GDP second only to Singapore in the Southeast Asia region.
Since U.S. President Donald Trump took office, he has pledged new policies to boost domestic energy production, Huang said, adding that this has made China vigilant, and eager to diversify its energy export markets.
“In the future, the U.S. will become an important competitor to energy-exporting countries,” Huang said. “From China’s perspective, it is necessary to engage in ‘energy diplomacy’ with other energy-exporting countries, including Brunei, before Trump becomes a significant competitor in the energy export market.”
Territorial claims vs. economic development
While China and Brunei’s territorial claims in the South China Sea overlap, Brunei often kept quiet when China adopted aggressive actions against other Southeast Asian countries like the Philippines.
Ei Sun Oh, senior advisor at the Malaysia Pacific Research Center, said China’s decision to work with Brunei in those overlapping areas amid growing conflicts with countries like the Philippines could be a deliberate way to showcase its power and influence to other Southeast Asian countries with which it has maritime disputes. The move could make it harder for those countries to unite to counter Beijing’s unilateral actions in the future.
“The reality is, China is pretty strong. Frankly speaking, Brunei’s naval and air force capabilities are no match for China’s,” Oh told VOA. “With such close economic ties with China, especially as they begin to cooperate in oil and gas exploration, it will be difficult for Brunei to stand against China. If Brunei can’t, how could Southeast Asian countries (counter China’s strong power)?”
Even if these Southeast Asian countries all have territorial claims in part of the South China Sea and want to exploit the region’s oil and gas resources, they lack the technology and often need to work with international oil and gas companies from the U.K., the Netherlands, France and elsewhere, he said.
If they see China working successfully with Brunei, they may be willing to temporarily set aside their territorial claims and follow the “Chinese model,” he said.
“The cooperation between China and Brunei could serve as a reference model for them. They may not disregard that model over territorial disputes with China. After all, all of these countries seek to develop their economies through oil and gas explorations,” Oh added.
Economic diversification
For Chhay Lim, a visiting scholar at the Southeast Asia Research Center (CSEAS) in Phnom Penh, Cambodia, the joint statement suggests that Brunei actually sees China as an indispensable and possibly its most important economic partner, despite its defense and security cooperation agreements with the U.S.
“Since Trump took office, Southeast Asian countries have been eyeing the risks and uncertainties in the international situation. The U.S. president has issued many executive orders, and we are looking at a more unstable world,” Lim said. “From this perspective, Brunei’s engagement with China is more economically driven, while also enhancing its resilience,” Lim told VOA.
China is one of Brunei’s largest buyers of liquefied natural gas, and Brunei is a participant of China’s ambitious" Belt and Road Initiative," he said.
While Brunei has always been known for its vast oil and gas reserves, it has realized that these natural resources will eventually be depleted, and is hoping to diversify its economy through working with China, Oh said.
“Brunei is naturally also seeking economic diversification,” Oh said. “Under this premise, Brunei has been welcoming incoming investments from China since last year. However, the majority of those investments are still focused around the oil and gas refining industries. Still, for Brunei, having some industrial development is certainly better than relying solely on the export of oil and gas without any refining industry. So from Brunei’s perspective, maintaining a good and increasingly close relationship with China is an important part of its economic diversification.”
Potential U.S.-Brunei military cooperation
In addition to economic considerations, analysts believe that China’s deepening cooperation with Brunei also has strategic aims.
Huang, of Taiwan’s National Defense Security Research Institute, said U.S.-China ties have been tense ever since the first Trump administration. As the tensions escalate, China may seek cooperation with non-major countries that it has previously had less interaction with, and its recent meetings with Brunei is an example of that, he said.
But this move may also draw the attention of Washington and other democratic countries, potentially leading to their strengthening security cooperation with ASEAN members, including Brunei, he said.
A recent report co-authored by the U.K.-based Adarga Research Institute suggested that the U.S. should adopt a multi-faceted approach to strengthen its relationship with Brunei, given the country’s strategic location in the First Island Chain and China’s expanding influence in the region.
According to Huang, the U.S. State Department’s 2024 Trafficking in Persons Report classified Brunei as a Tier 3 human trafficking country.
The Trump administration could walk back some of the human rights diplomacy of the Biden administration to strengthen ties with Brunei, against the wider backdrop of U.S.-China strategic competition, Huang said.
“The most important thing is still military cooperation,” Huang said. “Given the warming of relations between China and Brunei, it is worth watching to see the direction taken by the U.S.-led free world when it comes to strengthening security cooperation with Southeast Asian countries.”
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