Banking on Africa: Chinese Financial Institutions and Africa
The Chinese drive into the resource sector in Africa has already received much attention in the media and, increasingly, in scholarly literature. What has not been well understood is the role of Chinese financial institutions in support of the country's resource strategy and, increasingly, their entry into the previously unknown African market. With the Industrial and Commercial Bank of China's purchase of a 20% stake in one of South Africa's leading banks in late 2007, the stage has been set for a new phase of China's engagement on the continent that 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 paper 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, including its modalities and implications.