Stan­dard Bank pushes Chi­nese link with African coun­tries

China Daily (USA) - - BUSINESS - By CAI XIAO caix­iao@chi­

Stan­dard Bank, Africa’s largest lender, aims to be­come a bridge be­tweenChina and Africa and its com­mit­ted loans to Chi­nese com­pa­nies to­gether with lo­cal part­ner are set to hit the $2-bil­lion mark this year.

To bet­ter serve both theChi­nese and African mar­kets, it has formed a strate­gic part­ner­ship with In­dus­trial and Com­mer­cial Bank of China, one of its ma­jor share­hold­ers, said Fran­cois Gamet, CEO of Stan­dard Bank China.

Gamet said that the part­ner­ship means the bank can “op­er­ate on both sides of any trade”, not­ing that “with ICBC, we have com­mit­ted and syndicated loans to Chi­nese com­pa­nies for a to­tal project size of $3.8 bil­lion in Africa this year, as well as an­other $5 bil­lion in the short to medium term.”

Gamet said that the huge scale of bi­lat­eral trade be­tween China and Africa, as well as the con­ti­nent’s open busi­ness en­vi­ron­ment, of­fers Chi­nese firms a great many op­por­tu­ni­ties.

In the mean­time, “China is also the most con­se­quen­tial mar­ket for Africa and has the big­gest im­pact,” said Gamet.

“Work on the yuan’s in­ter­na­tion­al­iza­tion and help­ing Chi­nese com­pa­nies trans­form from en­gi­neer­ing, pro­cure­ment and con­struc­tion con­trac­tors to in­vestors or both in­vestors and con­trac­tors will be our op­por­tu­ni­ties.”

Gamet said Stan­dard Bank’s yuan set­tle­ment busi­ness had in­creased 180 per­cent year-on-year in the first eight months of this year. Stan­dard Bank is en­cour­ag­ing African im­porters to pay in ren­minbi and Chi­nese ex­porters to re­ceive ren­minbi.

Stan­dard Bank also has helped China Gen­eral Nu­clear Power Corp ac­quire the Husab Ura­nium Mine in Namibia for around $2.5 bil­lion, which is ex­pected to reach an out­put of around met­ric 6,500 tons next year.

Ac­cord­ing to the 47-yearold CEO, be­sides State-owned en­ter­prises, China’s pri­vate en­ter­prises are also be­com­ing more pos­i­tive about Africa, and Stan­dard Bank will help Chi­nese en­trepreneurs seek in­vest­ment op­por­tu­ni­ties in ar­eas such as re­tail.

Fan Bing, Asia head of cov­er­age at Stan­dard Bank, said the lender serves 150 ma­jor Chi­nese clients, in­clud­ing China Rail­way Group Ltd, Si­no­hy­dro Group Ltd and China In­vest­ment Corp.

Fan­said the bank set up dif­fer­ent teams to pro­vide con­sult­ing and fi­nanc­ing ser­vices in re­la­tion to the de­vel­op­ment of projects for their clients in Africa.

Jay Ire­land, CEO ofGen­eral Elec­tric Africa, said ear­lier that one-third of Chi­nese en­gi­neer­ing, pro­cure­ment and con­struc­tion com­pa­nies’

Work on the yuan’s in­ter­na­tion­al­iza­tion ... will be our op­por­tu­ni­ties.” CEO of Stan­dard Bank China

Fran­cois Gamet, equip­ment or­ders with GE this year are des­tined for projects in Africa.

Alan Wang, a Fresh­fields part­ner based in Bei­jing and Shang­hai, said that the main chal­lenges fac­ing Chi­nese in­vestors in Africa in­clude a lack of un­der­stand­ing of lo­cal laws, par­tic­u­larly re­lated to la­bor, en­vi­ron­ment and taxes; in­ad­e­quate in­fra­struc­ture, par­tic­u­larly power sup­ply, trans­port and lo­gis­tics; and a lack of po­lit­i­cal sta­bil­ity, as well as bu­reau­cracy and cor­rup­tion.

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