With Brunei Darussalam officials busy exploring new avenues to diversify the Sultanate’s economy away from petrochemicals, attention is being directed toward previously underdeveloped sectors for economic expansion. As demonstrated by the elevation of tourism to ministerial status under the Ministry of Primary Resources and Tourism (MPRT) in 2015, the country’s tourism sector is now at the forefront of the economic diversification drive, and China has emerged as an eager and viable partner in this effort.
On April 21, 2016 His Majesty Sultan Haji Hassanal Bolkiah met with China’s foreign minister, Wang Yi, at the royal palace in the capital Bandar Seri Begawan to discuss deepening economic and trade cooperation between the two countries. The high-level, strategic bilateral cooperation is set to encompass many areas, including tourism and cultural exchange.
Such close cooperation makes logical sense, as both countries are facing a need to restructure and upgrade their economies, as well as to accelerate sustainable development. These mutual aims were highlighted by Wang during a meeting with Brunei Darussalam’s second minister of foreign affairs and trade, Pehin Dato Lim Jock Seng, in April 2016, with the Chinese foreign minister adding that one of the areas in which his country is ready to expand its cooperation with the Sultanate is tourism.
As a step toward fostering cultural exchange and closer relations, the Sultanate plans to begin offering Chinese tourists visas on arrival. Chinese visitors are currently issued 14-day visas upon arrival, but only if their journeys are arranged through a travel agency, while Chinese business tourists require a sponsor in Brunei Darussalam.
At a press conference in April 2016, Wang referred to the visa regime reforms as “a piece of good news” for Bruneian-Chinese relations, and the move represents an important step forward for Brunei Darussalam’s efforts to capitalise on its rising popularity among Chinese tourists. According to MPRT statistics, travellers from China and Malaysia combined accounted for more than half of Brunei Darussalam’s 218,213 foreign visitor arrivals in 2015, with Chinese and Malaysian visitors accounting for 36% and 19%, respectively.
Indeed, Wang noted that the relaxed visa regime has the potential to encourage Chinese citizens not just to holiday in the Sultanate, but also to “nurture friendships with the Bruneian people to support and enhance the bilateral relationship”.
Outbound Chinese Tourism
Despite recent economic contractions in China, a large and generally affluent number of its people are still travelling abroad in growing numbers. According to the China Outbound Tourism Research Institute, outbound visitors from China totalled 120m in 2015, representing 12% year-on-year growth. Furthermore, these travellers spent $104.5bn in 2015, almost 17% more than the previous year. The institute attributed increasing personal incomes, favourable travel policies, both at home and away, and the appreciation of the renminbi as the main drivers behind increases in both the number of Chinese travellers and their spending abroad.
Brunei Darussalam is well-positioned to take advantage of these developments in the Chinese tourism sector for several reasons. Surveys conducted by Chinese travel agencies have indicated that Chinese outbound tourism will increase substantially with the implementation of more convenient visa policies, such as the visa reform proposed in April 2016 by the Sultanate; the operation of more international flights, such as Royal Brunei Airlines’ (RB’s) direct flights to Shanghai and Hong Kong; and the implementation of the “One Belt, One Road” (OBOR) strategy, of which Brunei Darussalam is a key participant.
A New Silk Road
The bilateral relationship between the two nations is important to the success of the OBOR initiative. China’s ambitious OBOR strategy aims to restore the famed Silk Road trading route of the past by building modern roads and ports that connect China to the Indian Ocean and Europe via South-east Asia. Brunei Darussalam is an ideal partner in the OBOR initiative, partly because of its own need to diversify its economy by increasing the quantity and scope of its exports and trade. It is also a fortunate coincidence that the OBOR aligns with the Sultanate’s long-term development blueprint, Wawasan Brunei 2035. Indeed, the two countries have announced plans to sign an intergovernmental cooperation document that links the OBOR initiative to Wawasan Brunei 2035.
China is the Sultanate’s biggest foreign investor, with Chinese companies having been awarded large contracts for major infrastructure projects, such as Temburong Bridge, which is expected to spur the tourism industry in Brunei Darussalam.
Another positive development announced in April 2016 was the central bank of Brunei Darussalam’s approval of a request by Bank of China to open a branch of Bank of China (Hong Kong) (BOCHK) in the Sultanate. BOCHK will become the first Chinese financial institution to operate in the country, and has the potential to make currency conversion easier for Chinese visitors. According to BOCHK deputy chief executive, Lin Jingzhen, preparations to open the Brunei Darussalam branch are in “full swing”, with indications that operations could begin by the end of 2016.
Brunei Darussalam’s tourism officials have employed several innovative marketing strategies to capitalise on China’s growing outbound tourism market. One of the most effective has been leveraging the celebrity status of Brunei Darussalam-born entrepreneur and celebrity Wu Chun, who has a significant fan base in China and has served as brand ambassador for RB since 2014.
“We are very pleased with what Wu Chun has been able to do for the airline and Brunei Darussalam in just one short year,” RB’s former deputy chairman, Dermot Mannion, told national media in August 2015. “With his efforts and influence, the number of tourists coming in from China has grown substantially.” Mannion noted that on average, 1.2m passengers fly with RB annually, with increasing numbers of passengers hailing from China. These passengers also appear to be taking the two-step tourism approach promoted by Bruneian tourism officials, in which Brunei Darussalam is included as a stop on a two- or three-destination itinerary.
Another strategy to make deeper inroads into the market in China is for Wu to publicise both the airline and Brunei’s tourist attractions at promotional events within China. The ultimate goal of this strategy is to capitalise on the China outbound tourism market not only by increasing the number of Chinese passengers flying RB, but also the number of Chinese tourists choosing Brunei Darussalam as a holiday destination.