They used to say of the British empire that trade follows the flag — and that the bankers were never far behind both. So, too, it seems with China.
Industrial and Commercial Bank of China is to take a 20% stake in South Africa’s Standard Bank, Africa’s largest, according to various reports. It is paying $5.5 billion. Standard Bank told shareholders earlier this week that it was in talks with an unnamed potential investor.
The stake represents a substantial step up in China’s involvement in Africa, which has largely been in natural resources hitherto via its program of aid and cheap loans in return for access to energy and minerals.
Standard is one of South Africa’s blue-chip banks and operates in 18 African countries, and there is plenty of opportunity for an African bank to finance the growing trade and investment between China and the continent. However, one sign of the concern the deal is raising in some quarters is that word is that South Africa’s central bank has put a cap of 25% on ICBC’s ownership of the bank.