Bank of China has been granted approval to open a branch in Brunei — the first time that a Chinese financial institution has established a presence in the oil-rich sultanate, and a further step towards Beijing’s aim of expanding its influence in Southeast Asia.

News of the bank deal follows a steady flow of Chinese investment into Brunei, including a $6bn project to construct an oil refinery and petrochemical production facility.

In a statement, Bank of China linked the decision to China’s “One Belt, One Road” strategy to build infrastructure and enhance trade along traditional routes across Eurasia and around Southeast Asia. It said Brunei is “one of the important countries along the Belt and Road route, [which] is politically stable and strategically located with well-developed infrastructure”.