Absa aims to use new Beijing office to strengthen China-Africa business ties

Absa Group, one of Africa's largest diversified financial services companies, aims to build stronger ties with Chinese firms as part of its global expansion strategy, amid growing investment and trade between China and Africa.

The Johannesburg, South Africa-based bank will focus on strengthening relations with state-owned entities, private companies, banks and development finance organisations via its subsidiary, which officially launched in Beijing in early May, according to Klaus-Dieter Kaempfer, CEO of Absa China.

"Absa's strategy in China is to use our office to connect better with the head offices of Chinese corporates who do business in Africa," he said.

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With a healthy client base already in place, Absa will make its presence known and develop much closer relationships with prospective clients on the mainland, he added.

Visitors walk past the the China-Africa Achievement Exhibition during the third China-Africa Economic and Trade Expo in Changsha, central China's Hunan province, in June last year. Photo: Xinhua alt=Visitors walk past the the China-Africa Achievement Exhibition during the third China-Africa Economic and Trade Expo in Changsha, central China's Hunan province, in June last year. Photo: Xinhua>

Absa's Beijing office operates under a wholly foreign-owned enterprise licence, which allows it to provide general advisory services and research to clients based in China for transactions across Africa.

"To be clear, we are not conducting business in China, and we're not doing domestic business," said Kaempfer. "What we're doing is developing relationships, advising on the capability that Absa Group has across its footprint in Africa, and our business actually gets executed there."

The plan to open a China office was revealed by Zhu Kai, principal and head of China Corridor at Absa Corporate and Investment Bank, in May last year. The opening of the office was originally planned at the end of 2023, but the licence was only obtained in December, following which a team was hired, delaying the launch to last month.

China's total trade with Africa increased 1.5 per cent year on year in 2023 to US$282.1 billion, while the continent's trade deficit with the world's second-largest economy expanded 36.4 per cent to US$65 billion, according to Chinese customs data published in February.

China's total investments in Africa hit nearly US$11 billion in 2023, its highest since at least 2005, according to data from Washington-based think tank American Enterprise Institute.

"I think what makes Absa an attractive banking and financial services partner is the quality and the depth of our network - our core operations are in Africa, and we've been there for more than 100 years," said Kaempfer.

The bank has a strong presence across a number of sectors, he added.

"We're the leading provider of renewable-energy finance across the continent, and we have very competent teams in mining, minerals, trade finance and debt."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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