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Jiang Jianqing
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“Many Western financial institutions are leaving Africa because of a shortage of available funds… What we have been doing here in Africa, and other Chinese banks have been doing here is a natural choice, and it’s a choice made on a commercial basis
.”Amongst the crowds at the World Economic Forum in Cape Town’s CTICC, it is only the trail of young assistants, fighting through the throng to keep up, that mark Jiang Jianqing out as a dignitary. Looking every inch the civil servant, Mr Jiang is in fact one of the main attractions, a co-chair of the conference and chairman of the world’s largest lender by market value, the Industrial and Commercial Bank of China.
ICBC made waves last year by taking a 20 percent stake in Standard Bank, becoming the largest shareholder in Africa’s biggest indigenous bank by assets. The $5.6bn cash deal was both the largest foreign acquisition by a Chinese bank and the largest single foreign investment into an African company. Since then, the two banks have cooperated in 60 deals on the continent, among them the recent $825m co-financing agreement for a power station project in Botswana.
The Standard Bank investment – and its unprecedented scale – were indicative of the focus that Beijing has, for the past decade, been putting on bilateral relations between China and Africa. China is now the continent’s second largest trading partner, with trade between the two increasing at around 38 percent a year on average since the turn of the century. The target of $100bn in bilateral trade volume by 2010, set by Beijing at the China-Africa summit in 2006, has already been surpassed, Mr Jiang explains, so it is natural to assume that soon China will top the list.
The Botswana project demonstrates ICBC’s continued interest in infrastructure, and Mr Jiang says that he still believes there is upside in a sector that has seen cooling interest from Western institutions. “Before the crisis, major large scale projects of infrastructure building were financed by institutions from Western Europe or the United States. So because of the credit crunch, many Western financial institutions are leaving Africa because of a shortage of available funds, so they stopped financing infrastructure in Africa,” he says. “What we have been doing here, and other Chinese banks have been doing here, is a natural choice, and it’s a choice made on a commercial basis.”
That the bank feels obliged to explain its commercial motivation is significant. For many, Chinese interest in Africa can be characterised as one-dimensional: China, the state actor, finances infrastructure to facilitate the smooth flow of commodities back to the factories of Shenzhen. This portrayal, fair or otherwise, is persistent. However, over the past few years of Chinese investment, both the manner and type of investor have changed, Mr Jiang says. Resources are a major part, but not the only one. “Chinese companies are investing in a broader range of sectors in Africa, for example in manufacturing industries and services, and also in financial institutions, such as ICBC did,” he says.
