By Staff Writer
One area of the Chinese economic footprint which is very little known across Africa, despite its steady growth on the continent and rising role, is the financial sector.
This can be understood given the fact that many Africans have been exposed only to a narrow perspective of China’s economic activities on the continent.
What has driven the narrative about China has constituted one theme: China’s provision of loans for investment in infrastructure development in Africa and how this is supposedly detrimental to Africa.
The media is a powerful tool, and when used relentlessly to spew a certain message, the results can be far reaching on knowledge and awareness of one’s environment.
And certain sections of the international media have certainly been relentless in driving this narrative.
China’s financial institutions are reckoned to have combined reserves totaling US$ 2 trillion that can be deployed into the global economy to serve the international monetary markets.
Perhaps the better known of these financial institutions is the Bank of China.
The Bank of China was established in 1912.
From that time up to 1949 when the Peoples Republic of China was established, the institution served as the central bank and a specialized international trade bank.
With each passing phase, the Bank metamorphosed in line with the changing needs and developments both domestically and internationally.
By 1994, the Bank of China had been transformed into a full blown state owned commercial bank.
In 2004 it was incorporated and listed on the Hong Kong and Shanghai stock exchanges.
To date, the bank provides a comprehensive range of financial services to customers not only in China but globally in 51 countries and regions.
All the banking services that any international commercial bank with global reach can offer, The Bank of China is able to meet these, and more.
These include but not limited to corporate and personal banking, financial markets services and investment banking, as well as operating subsidiaries in other sectors.
Some of the specific services that the Bank of China provides and of interest to the continent include the following.
Facilitating transfers and remittances, international settlements, conducting cross-border guarantees, clearing renminbi business in Africa and financing business transactions between Africa and China as well as with other regions and locations worldwide where the bank has branches.
There are several Bank of China Branches in Africa currently and the number is rising.
The China development Bank (CDB) is the largest quasi-commercial bank in the world. It has assets of over US$350 billion currently and is bigger than the World Bank.
The China Exim-Bank is the world’s third largest export credit agency which has a leading role in China’s foreign trade.
Then there is the Industrial and Commercial Bank of China (ICBC), which is the largest bank in the world by market value.
The ICBC has a large presence on the continent after having purchased a 20 percent share in South Africa’s Standard Bank Group Ltd. for US$5.4 billion in 2007.
The Standard Bank group which operates in eighteen African countries is the leading commercial bank in the provision of loans on the continent making ICBC a real key presence on the African financial scene.
The China Export and Credit Insurance Corporation (CECIC) also commonly known as Sinosure is the major provider of export credit insurance particularly for high value added export goods from China.
The China International trade and Investment Corporation (CITIC) focuses on equity investments in energy and natural resources globally and is very active on the African continent.
The China Exim Bank is responsible for financing the bulk of infrastructure activity on the African continent.
These Chinese financial institutions are playing a key role in driving China’s and Africa’s economic activities across the continent.
Many African enterprises and big organisations are doing business with more than one of these entities in the conduct of commercial transactions and export and import undertakings, not only with China but anywhere else across the globe.
For a longtime, the standard staple for banking in Africa has been western financial institutions, this however, is rapidly becoming a thing of the past.
Right across Africa, the sight of an African man or women entering a Bank of China facility is becoming more and more common.
Perhaps nowhere is the rising Chinese financial power exemplified in the US$5.4.billion payment for the 20 percent stake in the Standard Bank group referred to above.
This is because to date, this still remains China’s largest single foreign direct investment undertaking.
Experts agree that it only makes good business sense that as China and Africa deepen and expand their business interaction, Chinese financial institutions must be in the forefront of buttressing the growing business activities.
Take the Bank of China for example, its Yuan clearing house currently is responsible for handling over 60 percent of all Yuan clearances across Africa.
The bank is serving and working with nearly all central banks on the continent.