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Bridging Sino-Africa Economic Development Wenbin Wang PhD CEO, ICBC Africa

Bridging Sino-Africa Economic Development Wenbin 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.

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Bridging Sino-Africa Economic Development Wenbin Wang PhD CEO, ICBC Africa

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  1. Bridging Sino-Africa Economic Development WenbinWang PhD CEO, ICBC Africa March 12, Harare, Zimbabwe

  2. Agenda 1.Economy development experience in China 2.Fast Growing Sino-Africa Economic Ties 3.ICBC and SBG: what we can offer

  3. 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

  4. 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.

  5. 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.

  6. Moderate CPI and PPI CPI monthly changes • CPI well controlled with yoy growth at 2.6%, PPI remains steadily yoy. • Moderate inflation level leave more space for monetary policy. Yoy mom Source: NBS,China

  7. 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

  8. 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

  9. Investment and consumption two pillars for growth Structure of GDP improved gradually

  10. 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.

  11. 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”

  12. 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

  13. 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

  14. National High-tech Economic Development Zones

  15. 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

  16. 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.

  17. 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

  18. Long history of Sino-Africa Relations Chinese maps helped Portugal discover Europe's sea-route to the East "The Da Ming Hun Yi Tu" of 1389 Southern Africa's oldest map Recently discovered, this 1418 map may turn history on its head. Were the Chinese first to circumnavigate the world?

  19. Long history of Sino-Africa Relations China's first traded with Africa during the Han Dynasty (202 BC to 220 AD). By the Tang Dynasty (618AD-907AD), trade was extensive. Admiral Zheng He's seven voyages to the Indian Ocean 1405-1433

  20. Great matches between China and Africa

  21. 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).

  22. Great matches between China and Africa Africa is the second biggest continent, with 30 million km² of land, which implies large quantities of resources.

  23. 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.

  24. Sino-Africa trade and FDI speed up China’s FDI in Africa$mn

  25. FDI inflow to Zimbabwe 2012 Zimbabwe’s foreign direct investment in-flows reached US$400 million

  26. FDI inflow to Zimbabwe China remained Zimbabwe’s undisputed largest investor since 2010. 45% 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.

  27. China now the largest foreign investor in Zimbabwe 77% 63% 57% Construction $26,4 mnfor 3 projects. Mining $119 mnfor 46 projects Manufacturing$136 mnfor 42 projects

  28. Export and Import with China $mn Bilateral trade reached $1.1 bn in 2013, with Zimbabwe surplus of $274mn Export to China Import from china

  29. 3.ICBC and SBG: what we can offer 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

  30. 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

  31. ICBC-SBG Strategic Cooperation $55 bn investment 20% Shareholding

  32. ICBC-SBG Strategic Cooperation Global Markets Direct Investment Settlement and Cash Management StrategicCooperation Investment Banking Financing Custody Service

  33. Export Buyer’s Credit Overseas Project Finance Resource-backed Structured Finance Overseas M&A Loan What we can offer——Project Financing Dozens of material projects involving $9.3 bnsince 2008 Ethiopia Gibe III hydro-power station Botswana Morupule B power station South Africa ZAR20bn Renewable Energy

  34. What we can offer-Trade Financing • Global Custody • Global Cash Management • Export Buyer's Financing • Export Buyer's Financing • Resource Supported Structure Financing

  35. What we can offer——Global Markets Physical gold imports, loans, agency Signed the "Account Agreement precious metals lending transaction" Shanghai Gold Exchange, trading agents Precious Metals Trading for  customers As of the end of September 2013, ICBC and Standard Bank trading for customers volume reach to $ 41 billion. Foreign currency bond trading Bond trading and settlement BondTrading Forex Currency Market South African rand and U.S. dollar swap

  36. What we can offer——Direct Investments • Customer reference • Match making • Deal structure designing • M&A advisory service • M&A financing

  37. What we can offer——cross border RMB business RMB Cross-border Trade Settlement RMB Asset Management RMB Deposits and Loans RMB Bonds RMB Derivatives

  38. THANK YOU! Wenbin Wang PhD CEO, ICBC AFRICA Email：wenbinwang2013@gmail.com Bridging Sino-Africa Economic Developments March 12, Harare, Zimbabwe

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