Opinion | Bank of China fires back at ICBC in Africa
Bank of China should work hard to make its new Africa tie-up with Nedbank successful, and should seek similar pairings in other developing markets.
The bigger picture in this tie-up is the huge investment that Chinese firms have poured into Africa over the last decade. Much of that has gone into the resources sector, as China seeks to feed its own growing economy by helping Africa to develop its vast mineral and oil resources. At the same time, China has also invested big money to develop Africa's infrastructure, partly to help deliver all those resources to global markets. All of the Chinese companies engaged in such resource development require access to financing and other financial services, creating a huge demand for cross-border specialists with expertise in China and Africa.
Bank of China was historically China's most active bank on the global stage, designated for years as the nation's main provider of forex services before the nation overhauled its big four state-run banks about a decade ago to make them more commercial. Since then, however, Bank of China has been quickly eclipsed by the more aggressive ICBC, whose global expansion has included major new moves into Africa, the Middle East and even North America with its purchase of a US-based bank.
This new Nedbank tie-up looks interesting but largely symbolic, and is most likely designed to see if these two partners can work well together before they deepen their relationship. I commend Bank of China for taking the step, and would encourage it to work hard to make this relationship successful to build up its business in Africa where it would enjoy many natural advantages.