Open for business
Updated: 2013-03-29 07:15
By Andrew Moody and Zhao Yanrong (China Daily)
Chinese financial institutions are a growing presence in Africa
Liu Yagan is someone who can rightly claim to have had a significant impact on the African banking sector.
The 40-year-old was one of the chief architects of Chinese state-owned bank ICBC's $5.5 billion (4.27 billion euros) purchase of a 20 percent stake in Standard Bank, Africa's largest bank, which remains South Africa's largest ever foreign direct investment deal.
Six years on, he reflects on the groundbreaking move over drinks in the bar of the Radisson Blu in Sandton district, Johannesburg, late in the evening.
At the time of the 2007 deal, Liu was deputy chairman and general manager in the strategic investment department in the bank's Beijing head office.
He is now chief representative of ICBC Africa, based in Cape Town, where the bank opened an office of its own in 2011.
Liu says the investment partnership has worked well for both parties.
"The first year we worked together, we introduced 700 Chinese corporations operating in Africa to Standard Bank which opened accounts. You can't imagine that would have happened without our investment," he says.
"After six years, we cooperate very closely and we have also learnt a lot about Africa from them."
Africa has traditionally been a lucrative - and also risky - stomping ground for Western rather than Asian banks.
The UK's Barclays has operated on the continent since 1925. Its African operation became part of Absa Group, in which Barclays has a majority stake anyway, last year. Other leading players include the Portuguese bank BPI, Societe Generale of France and Banco Espirito Santo of Spain as well as the UK's Standard Chartered and Citigroup of the United States.
By comparison, the major Chinese banks are late entrants, with Bank of China first establishing a base in Zambia in 1997 and China Construction Bank setting up operations in Johannesburg in 2000.
Some of the biggest China deals have, in fact, been done by the country's policy banks, the Export-Import Bank of China and the China Development Bank, which have bankrolled many of the major infrastructure projects on the continent over the past decade.
Yuan Li, vice-president of CDB, said this month the bank had provided $16 billion of support to African governments and $700 million of loans to African small and medium-sized enterprises. China Exim Bank is estimated to have provided $20 billion of loans across the continent.