Timor Leste boosts trade and investment cooperation with China

China and Timor-Leste signed a Memorandum of Understanding (MOU) for cooperation on the Belt and Road Initiative (BRI) during the first Belt and Road Forum for international cooperation in March 2017.

Bilateral trade doubled in 2021 

China’s Foreign Minister, Wang Yi recently visited the South Pacific Islands, with Papua New Guinea and Timor Leste in East Asia being the last stops on that regional trip.

Discussions have concentrated on trade and development. Timor-Leste is the eastern part of the Timor Island that comprises Indonesia to the West, and which although largely undeveloped, has been considered as a candidate nation to join ASEAN.

East Timor was colonised by Portugal in the sixteenth century and was known as Portuguese Timor until 1975, when the Revolutionary Front for an Independent East Timor (Fretilin) declared the territory’s independence. Nine days later, it was invaded and occupied by the Indonesian military; it was declared Indonesia’s 27th province the following year. The Indonesian occupation of East Timor was characterised by a violent, decades-long conflict between separatist groups (especially Fretilin) and the Indonesian military.

In 1999, following a United Nations-sponsored act of self-determination, Indonesia relinquished control of the territory. As Timor-Leste, it became the first new sovereign state of the 21st century in 20 May 2002 and joined the United Nations and the Community of Portuguese Language Countries. In 2011, East Timor announced its intention to become the eleventh member of ASEAN, although this has not yet materialised. East Timor and the Philippines are the only two predominantly Catholic nations in Southeast Asia.

Wang said that Chinese investments into Timor-Leste’s “one network”, “one expressway” and “one port” projects in Timor-Leste, jointly built by the two sides, have become a benchmark for practical cooperation, which greatly alleviated the power shortage in Timor-Leste and promoted infrastructure construction and connectivity, consolidating the foundation of economic development in the country.

Atauro Island and Dili, Timor Leste

China-Timor-Leste bilateral trade nearly doubled last year, Wang said, noting that Timor coffee having become an online best-selling product in China. In fighting the COVID-19 pandemic, China was the first to provide vaccines and anti-epidemic supplies to Timor-Leste, Wang said, adding that China will continue to do its best to help Timor-Leste improve the health and well-being of its people according to its needs.

Timor-Leste’s Minister of Foreign Affairs and Cooperation Adaljiza Magno, speaking with Wang in the capital, Dili, thanked China for its help in Timor-Leste’s fight for independence, assistance with construction of the country and security maintenance.

She stated that the two sides are willing to strengthen the synergy of development strategies, deepen mutually beneficial cooperation in key areas including infrastructure, energy production capacity, poverty alleviation, education and health, help Timor-Leste boost its capability of self-development, and improve the well-being of its people. Both sides hope to continue cooperation on hybrid rice and the Juncao Technology and to build agricultural hi-tech development zones to help Timor-Leste secure food self-reliance and speed up its agricultural modernization process.

Juncao Technology, which in Chinese means breeding fungi with herbaceous plants, has benefited 106 countries and regions by addressing poverty, soil erosion and desertification. It uses specific types of mushroom to turn poor soils into more productive pastures – such as growing rice and coffee.

Chinese-built projects include the Timor-Leste State Grid, the Suai-Beaco Highway, the country’s first expressway, and the Tibar Bay Port. Wang said China is ready to work with Timor-Leste to map out a BRI cooperation plan and determine key areas, so as to inject new impetus into Timor-Leste’s mid- and long-term development.

Timor-Leste’s Former President Xanana Gusmao (right) and Chinese Foreign Minister Wang Yi (left). China has signed a series of agreements with Timor-Leste covering agriculture, media partnerships, and economic and technical cooperation.

Wang also met with Timor-Leste President Ramos-Horta, where he stated that China would support Timor-Leste’s candidacy to join ASEAN as a full member. China has a Free Trade Agreement with ASEAN, which includes Indonesia, Timor-Leste’s neighbour to the West. Such an agreement would effectively reunite Timor Island in free trade for the first time since 1975.

China-East Timor bilateral trade reached about US$400 million in 2021, with the main items traded from China being rice and construction materials. East-Timor exports to China are mainly beans, seaweed, sugar beet and coffee.

The country has a GDP of about US$5.5 billion and a population of about 1.5 million. The GDP per capita is about US$4,300. Timor-Leste applied to join the World Trade Organisation in 2020.


Source: Silk Road Briefing, June 06, 2022. https://www.silkroadbriefing.com/news/2022/06/06/china-timor-leste-to-boost-trade-investment-cooperation/

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