Tuesday, 21 August 2012 10:32

Newsletter 16

In this newsletter:

  • An important development for the yuan
  • Standard Chartered bank optimist about Afro China investment relations
  • China cementing ties with Africa

An important development for the yuan

African central banks were given access to yuan-denominated bonds for the first time after a large Chinese lender allocated them a purchase quota of three-year bonds, an important development in the yuan's wider use globally.

China Development Bank Corp, the State-owned lender and a supporter of government projects and Chinese companies looking to expand overseas, set aside part of its three-year dim sum bonds sold on Thursday for African central banks.

That was the first time that African central banks would be able to invest in yuan-denominated bonds.

CDB offered 1 billion yuan ($157 million) of 20-year bonds in Hong Kong, the longest time on record for the market denominated by short-term debt, at a yield of 4.3 percent, and 1.5 billion yuan of three-year notes at a yield of 2.95 percent.

Investors from Europe, the Middle East, and Africa purchased 60 percent of the bonds, said Gao Jian, vice-president of CDB. Sources close to the matter said that the central banks of Nigeria and Tanzania had made the biggest purchase among their African counterparts.

Li Dongrong, the vice-governor of the People's Bank of China, pledged earlier this month to promote the yuan's use in settling trade and investment with Africa, and encourage African central banks to hold more yuan assets.

"The internationalization of the renminbi is inevitable, and Africa - more than anywhere else - is a fertile market offering better opportunities for the Chinese currency," Fan said.


Standard Chartered bank optimist about Afro China investment relations

On a press conference held at CEMMAT office on Friday 27th July 2012, Mr. Alex Kamara, Chairman of the Board of Standard Chartered Bank disclosed that the bank supports investment and trade linkage between Africa and China. He also revealed that, the trade and investment linkages between China and Africa are significant and that Standard Chartered Bank has very established presence in these markets including. He assured that the Bank is well positioned to serve clients and customers by doing business between these markets.

Mr. Kamara who recently attended the Bank’s Annual Africa Chairmen’s Conference in Beijing, China said the motive behind choosing Beijing for this year’s conference was in line with the Bank’s commitment to use the unique global footprint to support, promote and grow economically enhancing trade and investment between China and Africa.

Mr. Kamara further noted that they also got the opportunity to participate in China’s 4th Conference of African and Chinese Entrepreneurs during the forum on China-Africa Cooperation in Beijing.

Talking about the trade and investment trend between China and Africa, Mr. Kamara said that the relationship between these two regions are complimentary. He said that Africa is a strategic supplier of natural resources. On the other hand, he said for many African countries, China does not only emerges as a major buyer of natural resources, but also as a supplier of capital goods to fulfill development needs.

Standard Chartered Bank is operating in 16 countries in Africa and has a human resource capacity of 7,000 staff in more than 180 branches.


China cementing ties with Africa

With President Hu Jintao pledging $20 billion in loans over the next three years at a meeting in Beijing attended by leaders from 50 African countries, China continues to cement its trade and infrastructure relationship with the resourceful Africa.

Both China and Africa are ready to strengthen the building of FOCAC so that it will continue to steer China-Africa relations toward greater development. The $20 billion figure is double what China had pledged at the last FOCAC meeting three years ago in Egypt. While FOCAC focuses primarily on economic cooperation, its political ramifications are clear.

As Liu Hongwu, director of the Institute of African Studies at Zhejiang Normal University told the Global Times newspaper: "Sino-African cooperation will promote South-South cooperation. Also, it accelerates the shifting of power from the West to the East."

Chinese Foreign Minister Yang Jiechi said the two sides have "carried out closer cooperation in international affairs." He also outlined plans for more exchanges, including of media organizations, so as to nurture "a favorable public opinion environment for sound and stable China-Africa relations."

China is also increasing its media outreach in Africa. One recent example was an agreement signed this month for the Zimbabwe Broadcasting Corporation to air CCTV news programs.

The speed with which China has engaged with the continent is breathtaking, with two-way trade rising about 30 percent each year so far in the 21st century, reaching a record $166 billion in 2011.


Last modified on Tuesday, 21 August 2012 10:40