Industrial and Commercial Bank of China signs $8.5 Billion with Standard Bank, Deepening China’s Financial Footprint in South Africa
The Industrial and Commercial Bank of China (ICBC) announced July 8 an $8.5 billion partnership with Standard Bank to extend loans and forex services to Chinese companies operating in African countries, an addition to the financial infrastructure undergirding China’s “One Belt, One Road” initiative. Depending on actual disbursements, the agreement will see a substantial uptick for China’s investment in South Africa, which has hovered around $5 billion each of the last three years.
The Standard-ICBC link-up furthers the trend of Chinese investment in South Africa’s financial sector. The China Development Bank (CDB) is the largest Chinese investor there, both in terms of project count and total investment value, while the China-Africa Development Fund is close behind in both categories. The focus on providing financial services suggests a generalized approach to China’s presence in South Africa, in contrast to other countries such as Angola, where the investment strategy has focused on a specific sector (in that case, the oil industry).
For both ICBC and Standard, this is just the latest foray into “One Belt, One Road” finance. Standard launched the Africa China Banking Centre in Johannesburg in June 2017, while ICBC recently announced that it will begin publishing two OBOR-related indices in partnership with Oxford Economics. ICBC previously acquired Standard’s London-based global markets division as part of a deal to purchase a 60% stake in the bank for $690 million.