Enter The Red Dragon
A significant event happened on the African economic landscape last week, when the Chinese bank Industrial and Commercial Bank of China (ICBC) bought 20% of Standard Bank. This is significant in a number of ways in that it represents the single largest foreign direct investment in Africa to date USD5.5 billion. Secondly, it shows the Chinese mean real business and they are not ready to give up on Africa. The Chinese have been busy investing in commodities in Zambia, DRC, Cameroon et c to secure raw materials for their growing industry back home. Now they have just bought a bank to make structured deals and trade financing easy for them! The purchase of the Standard Bank stake, gives them the financial avenues to structure deals in the emerging markets of Latin America, Asia, Africa and Middle East (of which Standard Bank is in more than 38 countries). In a single swoop, they will be in more than 38 countries! This is smart business by the red dragons. For all the big talk, America and Britain have been overtaken by China as the biggest investors in emerging markets.