The chairman of China’s biggest bank is reluctant to talk about his country’s trade war with the United States. But he lights up when he is asked about Africa.
“The African market is huge in potential,” said Yi Huiman, chairman of Industrial and Commercial Bank of China, which is also the world’s biggest by assets, during a visit to Johannesburg on Monday.
Asked about the trade war between China and the Trump administration, Mr. Yi gave only a vague response. “It will always be true that co-operation is stronger than disagreement,” he told a group of journalists.
But diversification to regions such as Africa will become increasingly important to Chinese businesses and Canadian investors as their countries face escalating tariffs and trade clashes with Washington.
Africa and its 1.2 billion people are “rapidly developing” and have become a “market of focus” for his bank, Mr. Yi said.
Since state-owned ICBC invested US$5.6-billion in 2008 to become the biggest shareholder in South Africa’s Standard Bank, the largest in Africa by assets, the two banks have provided US$8.5-billion in financing for 35 projects across the continent. This, in turn, has stimulated an estimated US$23-billion in Chinese investment in Africa.
Canadian government officials have already begun talking to African officials about working with a new African free-trade bloc. The free-trade zone, which is expected to begin taking effect as early as next year, would eventually include as many as 55 countries – more than any other trade agreement since the formation of the World Trade Organization.
Canada’s Ivanhoe Mines Ltd., which is developing major platinum and copper mines in South Africa and the Democratic Republic of the Congo, announced last month that it is selling 19.9 per cent of the company to China’s state-owned CITIC Metal, giving China a big new stake in African mineral resources. It was the latest sign of China’s growing appetite for investment opportunities there.
China’s strategy in Africa is both economic and political. It has invested heavily in building relationships with African countries at a time when the United States is neglecting the continent – and insulting it, as evidenced by U.S. President Donald Trump’s crude comments about “shithole” countries.
Chinese President Xi Jinping continues to place a high priority on cultivating African support. He arrived in South Africa on Monday night as part of a five-country tour of Africa and the Middle East – his first overseas trip since his presidential term limit was removed in March. After visiting Senegal and Rwanda, he will meet with South African President Cyril Ramaphosa on Tuesday and will later visit Mauritius as he leaves the continent.
Mr. Xi has described Africa as a “natural ally” for China. The continent was his first overseas destination after becoming head of state in 2013.
While the Chinese President is spending four days in South Africa this week, Mr. Trump has not even appointed an ambassador to the country; the post has been vacant for the entirety of his 18 months in office.
China is also a key supporter of the BRICS bloc of countries – Brazil, Russia, India, China and South Africa – which is holding its annual summit in Johannesburg from Wednesday to Friday.
The tariffs imposed by the Trump administration are not formally on the BRICS summit agenda, but South African Foreign Minister Lindiwe Sisulu said the member countries are “very concerned” about the trade friction.
“The trade wars are a dominant factor in international relations, and we won’t be able to avoid discussing them,” Ms. Sisulu told a presummit briefing on Monday.
Last month, the foreign ministers of the BRICS countries criticized the U.S. tariffs, complaining of a “new wave of protectionism.”
In contrast to the trade wars that have afflicted China at the global level, ICBC and Standard Bank have been pleased with their pioneering partnership in Africa.
Simpiwe Tshabalala, the chief executive of Standard Bank, said the 10-year partnership has brought successful innovations. There are Chinese-speaking financial advisers at his bank’s offices in Johannesburg, and the two banks have created a special credit card for Chinese tourists in Africa.
They are also jointly financing a major hydroelectric project in Zambia and a liquefied natural gas project in Mozambique. The projects are “game changers” in their countries, Mr. Tshabalala said.