Chinese Financial Service Providers Gain Foothold in Africa

China UnionPay's collaboration with Equity Bank Kenya to launch bank card services in Uganda, Tanzania, Rwanda and South Sudan has recently caught the media's attention in East Africa. With this move, UnionPay card services are now available in 39 African countries. Sudan Tribune reported that the initiative would allow UnionPay card holders to make transactions from automatic teller machines (ATMs) and sale point terminals across East Africa. Given the increasingly close business ties between China and Africa, Chinese financial service providers have poured into the continent and set up shop there.

A Chinese Internet user on a business tour to Kenya with the pseudonym, Uncle Jack, posted a microblog with a picture, saying, "The picture shows an ATM in the departure hall of the Nairobi International Airport in Kenya. UnionPay card holders can withdraw cash from all Equity Bank Kenya's ATMs and pay bills at the bank's business partners including supermarkets across the country. It's so convenient!"

In the Sandton City Shopping Center in Johannesburg, South Africa, signs showing UnionPay cards are welcome can be seen at many outlets. Although there are no such signs at some stores, hospitable storekeepers will greet customers of Eastern appearance, telling them UnionPay cards are acceptable. The first store in the shopping center began to accept UnionPay cards in 2010. Its owner said Chinese customers are eager to use bank cards to pay bills when they see the UnionPay sign on the counter. Since Chinese tourists have contributed to the growth of his store's international business, 11 other franchised stores soon followed suit, he added.

The Bank of China and China Construction Bank penetrated the African market even earlier than China UnionPay, which started its African business in 2006. The two banks set up their respective branches in Johannesburg in 2000 with the aim of reaching out to other African countries from South Africa. Both banks underline the importance of adhering to the localization strategy while seeking development. Thanks to their commitment to taking root in Africa and serving local customers, they have been able to thrive since 2008 when Western banks slashed their African business following the outbreak of the global financial crisis.

Zhang Jinguo, head of China Construction Bank's Johannesburg branch, said the branch is now involved in diverse sectors such as manufacturing, mining, petrochemicals, financial services, mobile communications, transportation, trade and logistics in more than 10 African countries. Its clients range from blue-chip African companies and prestigious multinationals to well-known Chinese business giants engaged in areas such as railway construction, mining and automobiles with investment in Africa. In the latest ranking released by the South African Reserve Bank, the Johannesburg branch of China Construction Bank came first in its group, accounting for more than 50 percent of the group's total assets. Eric Finaughty, CEO of Rand-Asia Trade Finance, said the branch is an important bank not only for South Africa, but also for other countries in the Southern African Development Community.

Africa holds a prominent place in the Bank of China's overseas strategy. Qiu Zhikun, head of the bank's Johannesburg branch, said his bank has worked in South Africa and Zambia for years. In light of the rapid growth of trade between China and Africa, it will open offices in Kenya, Angola, Mauritius and Nigeria and set up Chinese business counters in Ghana, Kenya, Uganda, Egypt, Morocco and Cameroon in cooperation with agent banks. It will thereby establish a network covering the entire African continent to provide premium, efficient financial services to Chinese companies in Africa and businesses with a Chinese background.

Unlike the Bank of China and China Construction Bank, the Industrial and Commercial Bank of China moved into Africa by acquiring a stake in South Africa's Standard Bank four years ago. A staff member with the bank's Africa representative office in Cape Town told People's Daily that the strategic alliance between the two major banks in Asia and Africa makes them each other's priority partners, while enabling them to share resources such as clients, networks and information. Standard Bank believes its cooperation with the Industrial and Commercial Bank of China has been successful and fruitful over the past four years. The two banks have worked together on a large number of projects, and had it not been for their cooperation, many of the projects would have been impossible to accomplish.


A recent Standard Bank report said that with the further deepening of China-Africa relations, business ties have gained importance for both parties.

Rene N'Guettia Kouassi, Director of the Economic Affairs Department at the African Union Commission, said, "China has become an indispensable partner in Africa. The inroads it has made have reached every corner of the African economy and society."

Muna Ndulo, a professor of law with Cornell University in the United States, said, "Rather than a negative force, China's involvement in Africa has recast the continent's position in the global economy. It has contributed immensely to changed perceptions of Africa from a problem continent to one filled with endless business opportunity."

An editorial in South Africa's Business Daily said that thanks to China, African products can sell at good prices, an increasing number of locals can afford decent clothes and electronic products and roads, bridges and low-cost houses are sprouting up from Mauritania to Mozambique.

These comments shed light on the pragmatic and mutually beneficial cooperation between China and Africa. Both share similar historical experiences as well as a common dream of renewal. Their cooperation is a choice based on mutual aspirations and necessitated by history.

The change from the "law of the jungle" advocated by the West to China's pragmatic and ideally altruistic diplomatic vision will usher in a new stage in the world's pursuit of harmony and prosperity. In this context, China-Africa relations will continue to make strides in the next decade.

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