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Compiled by the Government Communication and Information System --------------------------------------------------------------- Date: 11 Nov 2007 Title: China signals a new day for Africa --------------------------------------------------------------- -------------------- By John Battersby Johannesburg - The recent acquisition by China's largest bank of 20 percent of South Africa's Standard Bank is a watershed event in the growing relationship between China and the development of the African continent. China is an emerging global power and the sheer scale of its economy is already beginning to dwarf anything that has come before it, reports Southafrica.info. The Industrial and Commercial Bank of China (ICBC), which made the move on Standard Bank, recently overtook Citigroup as the world's largest bank, with a market capitalisation of $254 billion (R1.4 trillion). Its $5.5 billion (R36.7 billion) stake in Standard Bank, the bank with the largest presence in Africa, is the largest ever inward investment in South Africa, as well as the biggest Chinese financial acquisition ever. It further consolidates the uniquely strategic relationship between China and South Africa, its major partner on the African continent, and marks the moment at which South Africa can look to the new "BRIC" global economic powers - Brazil, Russia, India and China - as the source of foreign direct investment which has fallen short of expectations in the case of traditional trading partners Britain, France, the United States and Japan. China has in the past decade or so become the fastest growing investor in African infrastructure, one of the major source of soft loans to African states, one of the largest consumers of African oil and steel and the largest exporter of cheap manufactured goods to the continent. Bilateral trade between China and African nations has increased a staggering tenfold to $55.5 billion (R350 billion) in less than a decade. In the six years from 2000 to 2006, China pumped $6.6 billion (R43 billion) in foreign direct investment into Africa. China's state financial institutions, such as the Chinese Export-Import Bank, are advancing soft loans for developing African infrastructure, which run into $25 billion (R152 billion) over the next three years or so in four countries alone: Nigeria, Angola, Ethiopia and the Democratic Republic of Congo (DRC). China's strategic approach in building a long-term relationship with Africa to serve its own economic interests has opened up opportunities for African countries which were unthinkable even a decade ago. The Chinese approach of doing business without preconditions based on human rights and good governance has presented the continent's traditional trading partners, and multilateral bodies such as the World Bank, with a major challenge. - BuaNews |
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