Abstract

Brunei Darussalam’s foreign policy hedges between China and the United States to ensure both economic growth and security. Economically, Brunei deepens ties with China through the Belt and Road Initiative (BRI), being crucial as the nation diversifies from depleting natural resources. However, it balances this with robust defence ties to the U.S., such as joint military exercises and security cooperation. While Brunei maintains a low profile on its South China Sea claims, its increasing reliance on China poses risks. This paper explores how recent developments in 2024 may challenge Brunei's careful hedging strategy.

Introduction

Brunei Darussalam's foreign policy has long prioritized its security and welfare, and this approach is exemplified by its strategy of hedging between superpowers, especially amidst the renewed tensions in the South China Sea (SCS). Recent studies emphasize Brunei's balancing act between the United States and China, particularly in the context of their great power rivalry, exemplified by their trade war and broader geopolitical tensions (Hashim, 2020; Wei, 2024). Brunei seeks to align itself strategically with both, maintaining valuable partnerships without overcommitting to either. Some analysts argue Brunei is increasingly leaning toward China, given the alignment of China's Belt and Road Initiative (BRI) with Brunei's Vision 2035, especially in the context of infrastructure and trade (Kon, 2023). Moreover, discussions highlight how Brunei’s foreign policy stance has influenced its approach to its claims in the SCS, a matter it has historically downplayed (Putra, 2024). This article explores whether the developments in 2024 might prompt Brunei to reconsider its hedging strategy.

Brunei and Economic Bandwagoning

Brunei was the last ASEAN member to establish formal ties with China, but despite early security concerns, the two have since fostered a strong economic partnership. While China has faced conflict with other SCS claimants over resources and territorial rights, Brunei has long opted for a low-profile stance regarding its SCS claims, avoiding direct confrontation with China (Wei, 2024). Putra (2024) observes that for many Southeast Asian nations, the SCS is seen as a liability more than an asset. However, Brunei stands out as it continues to avoid challenging China's activities in its waters, driven by its economic alignment with China's BRI. As Brunei's natural resources decline, the regime increasingly relies on this economic partnership to sustain itself and stave off internal reforms (Putra, 2024).

This economic interdependence is underscored by several recent developments. In August 2024, Brunei lauded trade growth during the 4th Brunei–Guangxi Economic Corridor Joint Cooperation Committee (JCC) meeting, with officials highlighting efforts to foster supply chains and foreign direct investment (FDI) (Kon, 2024). Another significant project is the ongoing development of the Muara Port Container Terminal, which is slated for completion by 2027 and promises to enhance trade capabilities (Khmer Times, 2024). The Pulau Muara Besar (PMB) petrochemical project, spearheaded by the Hengyi Group, alongside advancements in seafood exports to China and hybrid rice trials, signal deepening economic ties between the two nations (Kon, 2024). China remains Brunei's largest FDI provider, driving growth in key sectors such as infrastructure, energy, and agriculture (ASEANFocus+, 2024).

Brunei and Security Balancing

Despite its economic closeness to China, Brunei maintains a careful balance in the security domain, particularly regarding the SCS. Although Brunei has remained silent on its claims in the SCS for years, it has its own territorial disputes, including unresolved maritime boundaries with China (Dela Cruz, 2024; Putra, 2024). Notably, Brunei rejected a Chinese proposal for a joint development agreement in the disputed waters, choosing instead to collaborate with Malaysia on similar terms (Firstpost, 2024). This reflects Brunei’s selective alignment with China, emphasizing the limits of their partnership in areas that touch on Brunei's national security concerns.

Brunei’s defense ties with the United States, on the other hand, remain robust. This year’s Iron Blade military exercises, which saw the first deployment of U.S. F-35s in Brunei, are a testament to the enduring strength of the Brunei–U.S. defense relationship (Hadley, 2024). A study by the Lowy Institute reveals that among ASEAN claimants in the SCS, the U.S. remains the preferred military partner, while China finds more traction among mainland Southeast Asian states (Sato & Yacoob, 2024). In 2024, Brunei also hosted the Pahlawan Warrior exercise and welcomed U.S. Secretary of Defense Lloyd Austin for bilateral talks, during which both nations celebrated agreements aimed at enhancing logistics cooperation (Simmons, 2024; USINDOPACOM, 2024).

Brunei's commitment to its defense is further illustrated by its 2024 defense budget, which saw a 32% increase from 2023 due to growing concerns over national security threats (Arthur, 2024). Even as China dominates Brunei's economic sphere, the U.S. continues to maintain strong military ties, evidenced by events like the U.S.-led Indo-Pacific Economic Framework meeting, which discussed clean energy in Singapore, and the US–ASEAN Business Council’s mission to Brunei aimed at bolstering U.S.–Brunei economic ties (Shepherdson, 2024; US-ASEAN Business Council, 2024).

Evaluating Brunei’s Hedging Strategy Today

Brunei’s foreign policy strategy of hedging between China and the U.S. has helped it navigate the complexities of great power rivalry. Economically, Brunei’s partnership with China is critical as the country diversifies away from its dwindling natural resources. This relationship has facilitated infrastructure development, allowing Brunei to remain competitive in the region. However, there is a risk that Brunei may become too economically dependent on China, drawing it further into China’s sphere of influence. China is already Brunei’s largest source of FDI, and as their economic interdependence deepens, Brunei’s ability to maintain its balanced approach may weaken.

On the security front, Brunei’s longstanding ties with the U.S. provide a counterweight to its economic alignment with China. The U.S. has proven to be a more reliable partner in defense and military cooperation, offering Brunei access to better military technology, expertise, and a broader network of allies. This relationship is particularly important as tensions in the SCS continue to simmer. While Brunei’s defense ties with the U.S. may be motivated by these tensions, it is also worth noting that Brunei’s diplomatic relationship with the U.S. predates its ties with China. The U.S. remains a crucial security partner, and Brunei benefits from the stability and security that this relationship offers.

Importantly, Brunei also hedges beyond the two great powers by engaging with regional neighbors and other global actors. Neither China nor the U.S. can afford to alienate Brunei, given its strategic position in Southeast Asia. Likewise, Brunei is careful not to fully commit to either superpower, as it benefits from maintaining a degree of autonomy and flexibility in its foreign policy. This delicate balance allows Brunei to continue its hedging approach, though external developments could eventually force a shift in strategy.

Conclusion

In conclusion, Brunei’s hedging strategy has so far been effective in managing its relations with the U.S. and China. By leveraging the strengths of both powers, Brunei has been able to secure economic and security benefits without becoming overly reliant on either. As tensions between the U.S. and China continue to rise, Brunei will likely maintain its current approach, carefully balancing its ties with both superpowers. However, long-term shifts in the global order, such as a potential decline in China’s economy or changes in U.S. defense capabilities, could prompt Brunei to reevaluate its strategy in the future.