It was an occasion that the South African government called “a great idea whose time had come”. The official launch of China Construction Bank (CCB) in South Africa in 2000 aimed to establish the bank as a leading financial service provider of choice in the region.
In an industry that has been historically dominated by largely Western financial service providers, there have been legitimate concerns that banks have been slow to seek solutions that more proactively confront the prevailing economic challenges in the African market.
So why, in a tightly controlled market, did CCB enter South Africa? The answer is the bank genuinely believes that South Africa not only has massive growth potential, but is also a gateway into the African continent.
“As one of the most important and prosperous countries in the African continent, South Africa is equipped with well-rounded infrastructure and considerable potential for unlocking economic growth,” explains Li Bin, CCB’s Cape Town Branch General Manager.
Indeed, it has taken pioneers like CCB to find more workable, responsive and agile solutions to deliver urgently-needed financial investment and unblock corporate funding bottlenecks in South Africa and the continent. According to Bin, CCB’s major innovation is that it proactively practises what the bank terms “New Finance” through the implementation of the “Three Major Strategies”. These emphasise inclusive and green development by utilising fin-tech in an attempt to build ecologies, set up scenarios and expand the user base. The bank strives to ground its products in a broad business community, thus generating appealing solutions for the local market.
“The banking industry has acted as the credit intermediary and played a critical role in the economy,” says Bin. “In our strategy and business practice, we apply this business logic to the digital economy, where banks can do more by capitalising on new technologies like 5G, AI, IoT, etc to offer more inclusive, convenient and efficient financial services that help empower the business community to create an ecology of co-existence and co-prosperity.”
And herein lies the core of CCB’s business philosophy: “To become a lifetime partner of its corporate customers.”
Leveraging CCB’s global presence
The bank’s arrival in South Africa in 2000 was, therefore, not surprising.
Bin says that China and Africa have had a long history of mutual trade and co-operation dating back to the 14th and 15th centuries, but with a significant difference in recent times. “The economic development of South Africa over the past two decades provided the bank with the opportunity to cultivate clients and expand businesses,” elaborates Bin. “The bank also managed to leverage its strength on both the international side and on the South African side to boost its growth.
“As bilateral trade and investment grew between China and South Africa, the bank inaugurated its Johannesburg branch in the new millennium – and since then, it has been committed to cultivating this new market. As one of the frontrunners of the banking industry globally, it is devoted to both business development and social responsibility in South Africa.”
Founded as the China Construction Bank Corporation in 1954, CCB has grown into a leading large-scale commercial bank in China. According to the Forbes Global 2000 list of the world’s biggest, most powerful public companies, CCB ranked the fifth-largest in the world.
Leveraging on its global presence, the inauguration of the bank’s Johannesburg Branch in October 2000 drew a large influx of corporate clients and businesses in South Africa and several African countries. Bin says that the aim of the Johannesburg Branch is to build a business focused on growing both domestic and foreign enterprises in support of their business requirements by providing bilateral loans (including CCB domestic guaranteed loans), syndication loans, trade finance, project finance, Renminbi services, and FX trade and settlement, while contributing to economic development. .
Over the past 20 years, CCB has achieved significant growth in South Africa. The branch targets clients in the integrated energy, communication, mining, financial services, trading, logistics, manufacturing and media industries in 47 countries in the sub-Saharan Africa region by providing multifaceted services to its clients.
Matchmaking
Bin attributes the CCB’s pioneering role in South Africa and Africa to the solid business and managerial foundations it has laid in recent decades, as well as to its commitment to matchmaking in the business community in its attempt to build a bridge between South Africa and China.
The bank, leveraging strength from both China and South Africa, facilitates bilateral trade and business. He says that the Johannesburg branch has been providing merchant banking, and wholesale and investment services to the South African business sector with a view to facilitating this two-way trade and investment between China and South Africa. Relying on the group’s strong financial background and overseas networks, the Johannesburg branch has used these advantages to provide financial services and funding to Chinese companies entering African markets, and simultaneously enhancing the development of Sino-African trade.
In recent years, the bank has made use of its fin-tech’s “first-mover” advantage to further build a dedicated matchmaking platform, in a bid to make the business communication run more efficiently, and bring the world within reach. In 2021 the bank organised the well-supported South Africa-China Wine Digital Exhibition to help facilitate the re-invigoration of the pandemic-stricken wine industry of the Western Cape. This vibrant digital exhibition introduced more than 20 local wineries to the Chinese market, with more than a half of them making their debut in China through this opportunity.
Localisation
Bin terms the bank’s decades-long development “localisation”, as the majority of its clients are African corporations, including dozens of South Africa’s listed companies, state-owned entities and international corporations.
The true test of localisation, he says, is all about results. “Eighty percent of the bank’s employees are local professionals, who are the cornerstone of high quality services. The Johannesburg branch has also established a strategic alliance with one of the leading financial groups in South Africa as part of its primary focus on matchmaking businesses.”
Africa expansion
Over the past years, CCB has illustrated the allure of its New Finance model. Globally, the bank’s market capitalisation is consistently reaching new heights. The Group ranks second among global banks by Tier 1 capital. The bank provides customers with comprehensive financial services, including personal and corporate banking, and investment and wealth management. With 14 510 banking outlets and 351 252 staff members, the bank serves hundreds of millions of personal and corporate customers. The bank has subsidiaries in various sectors, including fund management, financial leasing, trust, insurance, futures, pension and investment banking, and has more than 200 overseas entities covering 31 countries and regions.
The next key milestone will be to expand its presence in the African continent. Bin says he expects the Johannesburg branch to play a major strategic role in the bank’s ongoing Africa expansion drive. “The bank has been in South Africa and covered businesses on the African continent for two decades. Our products and services have expanded significantly, and the amount of project finance assets has risen dramatically in Zambia, Namibia, Congo and other African countries and regions, covering many national economies and industries that enhance community livelihood.”
‘Profit is not the only goal of CCB’
CCB prides itself in being a good corporate citizen to all stakeholders, including local communities, clients and employees; steering away from the blind pursuit for profit. “We’ve made a number of charity contributions and donations in a bid to help the impoverished and uplift communities,” says Bin.
The bank has donated to the Red Cross War Memorial Children’s Hospital for the last six years in an effort to support its various projects.
In 2022, the bank donated food, bedding and fire-extinguishers to a preschool educational centre in Gugulethu, Cape Town, and also supported the local Walking Bus Project, an initiative to improve learner safety.