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Brunei SMEs urged to invest in China's 'less developed' areas
Publication Date : 28-10-2012
Small and medium enterprises (SMEs) from Brunei are being asked to invest in western and northeastern parts of China, which offer businesses attractive incentives, an official at the Chinese embassy in Brunei said yesterday.
In an interview with The Brunei Times at the embassy in Kg Sg Hanching, Hudson Wang, the head of the Economic and Commercial Office, said the Chinese government was committed to attracting foreign direct investment in the region, and that these less-developed parts of the country had rich natural resources.
He also said that labour costs were low, as were prices.
"The local government is (looking for) foreign investment ... (and) perhaps they will offer (Bruneian investors) more incentives."
He added that regional inducements could help offset the higher costs incurred by firms stemming from recent reforms to China's foreign-investment incentives. As part of these reforms, preferential tax rates for foreign firms were abolished, Wang said.
Among the challenges faced by firms wanting to invest in China were the fierce competition, the language barrier and a lack of familiarity with the local business environment, particularly when it came to finding partners.
"In China, we have around 10 million enterprises, good ones and bad ones, because China is huge. Maybe sometimes people tell you certain companies are not good but that's not true. Sometimes you meet companies that you think may be good companies but are in actual fact not good. So you have to choose and find out for yourself. It's the same in every country," he said.
Wang was particularly keen to see SMEs in Brunei invest in western and northeastern China. He said that existing investment by small Bruneian businesses in China was insignificant.
"So far, Brunei's investment in China is very minimal. I think Brunei enterprises (have only just started) to think about going global. In China 15 or 16 years ago, the government launched a campaign to encourage Chinese firms, regardless of whether they were state-run or private, to go global and (open themselves up to) international competition," he said.
He said that Brunei's government had realised the need to diversify the Sultanate's economy and had been pushing local SMEs to grow.
"Everybody knows that the country's economy relies heavily on oil and gas. Sooner or later, they will run out because they are exhaustible resources.
"Brunei is a small market. If you only concentrate on the domestic market, (you are limiting your chances of growing). So they have to go overseas. I heard about some Bruneian entrepreneurs who were investing in China but I think the investment amount is very small. Some are successful but some turned out to be a disappointment," Wang said.
He said Bruneian SMEs needed to be boldly venture abroad.
"Some people are familiar with the practices in Brunei, but know very little (about) how business people operate in different countries. They need to know. I think this is the responsibility of not only the entrepreneurs but also the government and even embassies. We should educate people how to trade abroad.
"SMEs in Brunei are mostly very small. They have limited capacity in finance, technology, management skills and networking. I think those are some of the challenges that need to be addressed by entrepreneurs themselves, the government and also the foreign missions."