Over the past decade China’s trade with Africa increased from $100 billion in 2007 to $230 billion by the end of 2017. While much of this trade has been dominated by Chinese exports, the inaugural China International Import Expo (CIIE) held in Shanghai from 5 – 9 last month marked the practical expression of China’s intention to change the content and balance of its trade with Africa.
As China evolves away from export-led growth towards a mixed consumption-led development model, Africa has been identified as China’s chief source of future beneficiated commodities, industrial and services imports. To this end both the national and provincial governments of China worked to ensure that many of the 150 000 Chinese importers attending the inaugural CIIE arrived with pre-determined import orders to fill.
As such, the CIIE represented a unique opportunity for Standard Bank, Africa’s biggest bank, which is also celebrating a decade-long institutional relationship with the Industrial and Commercial Bank of China (ICBC), “to demonstrate the capability of the Africa-China trade corridor that both banks have been striving to build,” says Leon Barnard chief executive, Personal and Business Banking, Africa Regions, Standard Bank.
Standard Bank’s extensive investment in building the world’s most advanced trade platform between Africa and China saw the bank take 61 clients from nine African countries to the inaugural CIIE, assisting them secure export contracts with Chinese receivers at the Expo.
“Standard Bank is a leading provider of trade solutions in Africa; financing, operating and expanding the import and export value chain between Africa and China,” said Mr. Barnard. To this end, Standard Bank and ICBC have purposefully structured their Africa-China trade corridor to meet the needs of both Chinese importers and African exporters – at both ends of this unique global trade platform.
Specific features of Standard Bank’s Africa-China trade corridor include:
Africa China Banking Centers (ACBCs), already operational in South Africa, are one-stop-shops for Chinese businesses and individuals seeking to transact in, across and out of Africa. Manned by Chinese-speaking bankers, ACBCs are one-stop-banking shops for personal and business banking clients as well as for Chinese importers and exporters. ACBCs provide seamless consultation and advisory services via telephone, online or email, and now also via WeChat, linking African and Chinese clients with China’s highly networked digital banking and customer knowledge systems. More ACBCs are currently rolling out in Nigeria with other African hubs to follow. “ACBCs offer Chinese and African clients a business-to-business networking and personal advisory service, daily accessing and unlocking new Africa-China trade opportunities,” adds Barnard.
Thirty Chinese-speaking relationship managers across 15 African markets. Many of these are Africans who speak Chinese, delivering Standard Bank’s broader pan-African and global capabilities to individual as well as small and large commercial Chinese enterprises operating in individual African countries, between African countries and between Africa and China.
An entirely Chinese-speaking Standard Bank branch at Crown Mines in Johannesburg. “Located in the heart of Dragon City, the branch helps Chinese importers and exporters access South African business opportunities, while also providing reach into Lesotho, Swaziland, Namibia, Botswana, Zimbabwe and Mozambique,” says Barnard
Twenty four-hour regulatory-compliant and risk-managed foreign exchange service which includes the Renminbi.
Standard Bank supports renminbi internationalisation in Africa by: providing short-term renminbi credit facilities, money market deposit and call accounts; global markets trading products; CNY-denominated accounts, cash settlement transactions and notes for Chinese businesses; calibration of remittance flows; and on-the-ground expertise.
SHYFT, Standard Bank’s global digital wallet for Android and iOS, allows foreign currency purchasing and trade – all from a mobile phone. Clients and customers throughout Africa and in China can use SHYFT to send, spend, store or exchange funds in USD, EUR, GBP and AUD.
Standard Bank is the first African bank to support UnionPay cards (China’s most widely used credit card) in 10 African countries. This will allow Standard Bank to issue UnionPay cards in South Africa, broadening the geographic footprint – and potential customer reach – of UnionPay in Africa.
Standard Bank recently launched its first Chinese Internet banking site in Angola. More Chinese Internet banking sites will be rolled out across the continent in 2019.
Hosting ICBC’s ‘I Go Global’ joint credit card reward schemes for Chinese travelers in South Africa, Kenya and Ghana. Since the initial launch of the scheme in South Africa in November 2017, ICBC has provided transnational services to nearly 100 000 credit cardholders in Africa. The joint Standard Bank – ICBC credit card reward scheme is currently rolling out to other African markets.
A bespoke retail banking solution that facilitates personal remittances between South Africa and China.
The signing of a $500 million loan facility with the China Development Bank at the recently held BRICS Summit held in Johannesburg in July 2018. Over the next seven years the facility is designed to support the growth of Standard Bank’s African SME clients, many of whom are looking to export to China.
The ICBC-Standard Bank Plc Global Financial Market Platform Business Joint Venture, “is a very successful business and trade development platform for clients in both Africa and China,” said Mr. Barnard.
Key in building such an effective trade and investment corridor between Africa and China has been Standard Bank’s institutional partnership with ICBC.
The two banks work closely together to provide product offerings at both ends of the Africa and China trade corridor. As part of this developed trade partnership, Standard Bank increasingly refers its African clients to ICBC for banking services when they enter China. Similarly, ICBC refers its clients to Standard Bank when they enter or deal with Africa. Both banks work together to jointly service mandates with businesses active in both Africa and China.
The strategic partnership between Standard Bank and ICBC provides an unrivalled proposition to deepen Africa-China trade in direct support of China’s import-led domestic development programme. As a result of Standard Bank and ICBC’s relationship, Standard Bank is confident “that we can serve clients on the ground in Africa while simultaneously accessing the highest levels of China’s capital, banking, trade and investment network,” said Barnard.
Standard Bank’s Africa-China trade corridor demonstrates that by building the relationships and financial structures, deploying the skills and evolving the platforms and technologies, “that it is supporting and growing the ability of Africa and China to realise the full trade potential that we have in each other,” said the chief executive, personal and business banking, Africa Regions, Standard Bank.