As a moderate ASEAN Muslim country, Brunei has always maintained a neutral position on the disputes, insisting on a peaceful resolution. Though Brunei is one of the South China Sea claimants, it has been a supporter of the principle of shelving disputes and pursuing joint development proposed by China. Last December, Brunei and Malaysia declined to attend a meeting of South China Sea claimants in ASEAN held by the Philippines. A new ASEAN chair customarily holds an unofficial meeting of ASEAN foreign ministers in January to have an open discussion on the major issues of the year. But fearing the South China Sea issue would again become the major topic, Brunei called off the meeting to avoid an adversarial stance with China.

Constrained by its own influence and limited resources, Brunei is unlikely to put forward proposals for resolving the South China Sea disputes. But by making the most of its neutral position, it can coordinate with and mediate between the parties, thus helping reach a compromise acceptable for all and promote progress in seeking a peaceful settlement. In order to minimize internal differences in ASEAN, Brunei will likely suggest that China quicken the formulation of a code of conduct in the South China Sea. It would do so on the basis of adhering to the consensus reached at the Phnom Penh summit last year, which opposes bringing the issue to the international arena. In the meantime, Brunei would also work together with other ASEAN members to restrain the provocative actions of Philippines and Viet Nam.

ASEAN integration

Against the backdrop of the worldwide economic downturn, with the United States and European countries mired in financial and debt crises, Brunei's cardinal task as the ASEAN chair is to help overcome the adverse external environment and establish the ASEAN Economic Community on schedule. Though much progress has been made since 2012, the deadline for establishing the ASEAN Economic Community has been delayed for almost a year to the end of 2015 for a variety of reasons, such as the unbalanced development and divergent interests in ASEAN, fund shortages for infrastructure construction, as well as instability brought by South China Sea disputes.

Former ASEAN Secretary General Surin Pitsuwan pointed out that the major challenge for ASEAN would be whether its member states have the willingness to deepen regional integration. To what extent ASEAN nations will narrow their differences this year will be essential to ASEAN integration as well as the integration of East Asia led by ASEAN.

ASEAN has its own advantages. As labor costs in the Chinese market rapidly increase, many overseas-funded enterprises have begun to withdraw from China's mainland. Meanwhile, the demographic dividend of ASEAN nations is becoming increasingly attractive to foreign investors. Statistics show that foreign direct investment in ASEAN nations reached $117 billion in 2012, $1 billion more than foreign investment to China. Moreover, with the spillover effect of the Chinese economy, the Chinese market has become a powerful engine driving the export of ASEAN nations, laying a solid foreign trade foundation for ASEAN economic development.

The outside world is optimistic about ASEAN's economic growth. The International Monetary Fund has estimated that the growth rate of five ASEAN members—Indonesia, Malaysia, Thailand, the Philippines and Viet Nam—will reach 5.8 percent in 2013. In its Southeast Asian Economic Outlook 2013 report, the Organization for Economic Cooperation and Development forecasted that the six major ASEAN countries—Indonesia, Malaysia, Thailand, Singapore, the Philippines and Viet Nam—will post an average economic growth rate of 6 percent in the next five-year period. At an unofficial meeting of ASEAN economic ministers in March, they reiterated their commitment to the establishment of the ASEAN Economic Community by 2015. They also passed documents and proposals on promoting regional economic integration.

As Brunei lives up to its role as ASEAN's rotating chair, 2013 is a year presenting both challenges and opportunities. It offers a good chance for the country to display leadership.

The author is an associate research fellow with the China Institute of International Studies

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