Banking on Africa: Chinese financial institutions and Africa
1 January 2008
The Chinese drive into the resource sector in Africa has already received much attention in the media and, increasingly, in scholar literature. What has not been well understood is the role of Chinese financial institutions in support of the country's resource strategy and, increasingly, its entry into the previously unknown African market. With the Industrial and Commercial Bank of China's purchase of a 20% stake in South Africa's leading bank in late 2007, the stage has been set for a new phase of China's engagement on the continent which promises to expand the sectoral reach of Chinese financial institutions and, concurrently, lay the foundation for ventures into new areas like commercial and perhaps retail banking. This policy report will outline the origins of China's financial institutions, their reform and expansion beyond the domestic market; the role they have played in support of China's resource strategy towards Africa; and, finally, the nascent movement into commercial banking in Africa, its modalities and implications.