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Bridging Sino-Africa Bridging Sino-Africa
Economic DevelopmentEconomic DevelopmentWenbin Wang PhD
CEO, ICBC Africa
March 12, Harare, Zimbabwe
Agenda
1.Economy development experience in China
2.Fast Growing Sino-Africa Economic Ties
3.ICBC and SBG: what we can offer
1.Economy development experience in China
Economic growth cools down but still in good shape
Investment and consumption two pillars for growth
FDI played an important role in stimulating economy
Chinese Enterprises going abroad and ODI speeding up
Macro-economic developments in China
World economy in 2013 showed signs of recovery with YOY growth at 2.4%.
High income countries performed well, with US 1.9%, Japan 1.7%.Euro Area still struggled in mud with -0.4%.
After decades of high speed growth China cooled down with 7.7%,still resilient. Sub-sahara areas grew at 4.7%
Prospects for 2014 are sensitive to the tapering of monetary stimulus in the US, and to the structural shifts in China.
PMI above active level
Manufactory PMI rebounds from 2013H2. Declines after Nov largely due to holiday season.
Source: NBS,China
Manufactory PMI rebounds from 2013H2. Declines after Nov largely due to holiday season.
Moderate CPI and PPI
CPI well controlled with yoy growth at 2.6%, PPI remains steadily yoy.
Moderate inflation level leave more space for monetary policy.
CPI monthly changes
Yoymom
Source: NBS,China
But there are great challenges ahead…
Investment remains an important driver of growth, hunger for great amount of energy and resource.
Oil and gas
Mine and metals
With the macro-economy growth slow down, overcapacity problems become more and more common
Iron and Steel
Panel Glass
Ship building
Solar and wind power equipment
Environment problems raised great concerns worldwide
New Cabinet’s Manifesto
Nationwide Anti-Corruption movement targeting both “tigers and flies”
Deregulation of governmental approval procedures
Most strict environment protection measures
Growth of high quality with 2014 GDP target at 7.7%
Encourage Chinese enterprise “Going Abroad” and capacity export
Investment and consumption two pillars for growth
Structure of GDP improved gradually
FDI played an important role in Economy growth
Chinese government began to introduce FDI since early 1990s
FDI Played an important role in stimulating economy growth
Along with FDI increase are Job creations, Tax growth, and Technology transfer.
Reform and Opening Up Policy
“Development is the absolute principle ”
“Wading across the stream via tangible stones”
“White or Black, whichever catches the rat is good cat”
Shenzhen Economic Zone
First experimental Area in China proposed by Deng Xiaoping in 1979
An experimental ground for the practice of market capitalism
Special policies to attract foreign investment
Encourage foreign joint ventures and private enterprise development
Free trade zone with tax exemption
Opening up more costal cities
China set another four Economic Zone, Zhuhai, Xiamen, Hainan, Shantou
Another 14 costal Cities were opened up thereafter
All these cities are costal cities and have relatively good infrastructure
National High-tech Economic Development Zones
1988 1991 1992 1997 2007 2009 2010 2011 2012 2014
1 26 26 1 1 2 26 5 17 9
FDI Attraction Policies
“Build the nests and wait for birds”
► Setup special areas for foreign investment
► Build up necessary infrastructures, roads, utilities, offices
► Streamline governmental approval process
Favorable policies towards FDI
► Relatively cheaper land price
► Tax exemption and deduction
Rules and laws protecting foreign investment
Foreign Currency trade and settlement facilities
Chinese Enterprises going abroad and ODI speeding up
With the high growth of domestic economy, Chinese overseas investment increased rapidly.
More and more Chinese Companies are going abroad with FDI.
By 2012, China ODI worldwide amounts to $532bn, among which ODI towards Africa was $21bn.
2.Fast Growing Sino-Africa Economic Ties
Long history of Sino-Africa Relations
Great matches between China and Africa
Recent progress of Sino-Africa relations
FDI From China and Chinese Enterprises in Africa
Long history of Sino-Africa Relations
Recently discovered, this 1418 map may Recently discovered, this 1418 map may turn history on its head. Were the Chinese turn history on its head. Were the Chinese first to circumnavigate the world?first to circumnavigate the world?
Recently discovered, this 1418 map may Recently discovered, this 1418 map may turn history on its head. Were the Chinese turn history on its head. Were the Chinese first to circumnavigate the world?first to circumnavigate the world?
"The Da Ming Hun Yi Tu""The Da Ming Hun Yi Tu" of of 1389 Southern Africa's oldest 1389 Southern Africa's oldest mapmap
"The Da Ming Hun Yi Tu""The Da Ming Hun Yi Tu" of of 1389 Southern Africa's oldest 1389 Southern Africa's oldest mapmap
Chinese maps helped Portugal discover Europe's sea-route to the East
Long history of Sino-Africa Relations
Admiral Zheng He's seven Admiral Zheng He's seven voyages voyages to the Indian Ocean 1405-1433 to the Indian Ocean 1405-1433
Admiral Zheng He's seven Admiral Zheng He's seven voyages voyages to the Indian Ocean 1405-1433 to the Indian Ocean 1405-1433
China's first traded with Africa during China's first traded with Africa during the Han Dynasty (202 BC to 220 AD). By the Han Dynasty (202 BC to 220 AD). By the Tang Dynasty (618AD-907AD), trade the Tang Dynasty (618AD-907AD), trade was extensive.was extensive.
China's first traded with Africa during China's first traded with Africa during the Han Dynasty (202 BC to 220 AD). By the Han Dynasty (202 BC to 220 AD). By the Tang Dynasty (618AD-907AD), trade the Tang Dynasty (618AD-907AD), trade was extensive.was extensive.
Great matches between China and Africa
Great matches between China and Africa
China was the largest crude oil importer from Sub-Saharan Africa in 2012, followed by the United States.
Sub-Saharan Africa exported 1.22 trillion cubic feet of natural gas in 2011 via pipeline and liquefied natural gas (LNG).
Great matches between China and Africa
Africa is the second biggest continent, with 30 million km² of land, which implies large quantities of resources.
Recent progress of Sino-Africa relations
China has seen a substantial increase in its support to African infrastructure projects in the past years.
In 2012, Chinese enterprises completed construction contracts worth $40.83 bn in Africa.
From 2009 to 2012, Africa remained China's second largest overseas contract market.
Sino-Africa trade and FDI speed up
- 24 -
Country 2009 2010 2011 2012
Africa 9332 13042 16244 21729
RSA 2306 4152 4059 4775
Nigeria 1025 1210 1415 1949
Algeria 751 937 1059 1305
Angola 195 351 400 1245
Sudan 563 613 1525 1236
China’s FDI in Africa $mn
FDI inflow to Zimbabwe
2012 Zimbabwe’s foreign direct investment in-flows reached US$400 million
FDI inflow to Zimbabwe
45%China remained Zimbabwe’s undisputed largest investor since 2010.
China invested in projects worth US$180.2million in 2012, and accounts for 45% of the US$400 million of the foreign direct investments pouring into Zimbabwe during 2012.
China now the largest foreign investor in Zimbabwe
63% 57% 77%
Manufacturing $136 mn for 42 projects
Mining $119 mn for 46 projects
Construction $26,4 mn for 3 projects.
Export and Import with China
Import from china
Export to China
Bilateral trade reached $1.1 bn in 2013, with Zimbabwe surplus of $274mn
$mn
ICBC——Largest commercial bank in China
Corporate Customer 4.6 million
Private Banking Clients 411 million
Total Asset USD 3.1 trillion
Total deposit USD 2.4 trillion
Total loan USD 1.6 trillion
Branches 17000
Employees 450,000
3.ICBC and SBG: what we can offer
Standard Bank——Largest commercial bank in Africa
Established in 1862, with more than 150 years’ history
Total asset USD 160 billion
Net profit USD 17 billion
Covering 20 countries in Africa, with 1222 branches
ATM amounts 7884
12 million personal and corporate clients
3.ICBC and SBG: what we can offer
ICBC-SBG Strategic Cooperation
$55 bn investment20% Shareholding
ICBC-SBG Strategic Cooperation
Direct Investment
Global Markets
Settlement and Cash
Management
Investment Banking
Custody Service
Financing
Strategic Cooperation
Export Buyer’s Credit
Resource-backed Structured Finance
Overseas M&A Loan
Overseas Project Finance
Dozens of material projects involving $9.3 bn since 2008
Botswana Morupule B
power station
Botswana Morupule B
power stationEthiopia Gibe III
hydro-power station
Ethiopia Gibe III
hydro-power stationSouth Africa ZAR20bn
Renewable Energy
South Africa ZAR20bn Renewable Energy
What we can offer——Project Financing
What we can offer-Trade Financing
Global Custody
Global Cash Management
Export Buyer's Financing
Export Buyer's Financing
Resource Supported Structure Financing
What we can offer——Global Markets
Trading for
customers
Trading for
customers
Precious Metals
Precious Metals
Bond TradingBond Trading
As of the end of September 2013, ICBC and Standard Bank trading for customers volume reach to $ 41 billion.
As of the end of September 2013, ICBC and Standard Bank trading for customers volume reach to $ 41 billion.
Physical gold imports, loans, agency
Signed the "Account Agreement precious metals lending transaction"
Shanghai Gold Exchange, trading agents
Physical gold imports, loans, agency
Signed the "Account Agreement precious metals lending transaction"
Shanghai Gold Exchange, trading agents
South African rand and U.S. dollar swap South African rand and U.S. dollar swap
Foreign currency bond trading
Bond trading and settlement
Foreign currency bond trading
Bond trading and settlement
Forex Currency Market
Forex Currency Market
What we can offer——Direct Investments
Customer reference
Match making
Deal structure designing
M&A advisory service
M&A financing
What we can offer——cross border RMB business
RMB Cross-border Trade Settlement
RMB Asset Management
RMB Deposits and Loans
RMB Bonds
RMB Derivatives
Bridging Sino-Africa Economic Bridging Sino-Africa Economic
DevelopmentsDevelopments
March 12, Harare, ZimbabweMarch 12, Harare, Zimbabwe
THANK YOU!THANK YOU!
Wenbin Wang Wenbin Wang PhDPhD
CEO, ICBC AFRICA CEO, ICBC AFRICA
EmailEmail ：： [email protected]@gmail.com
