Banking on personnel skills

Soaring trade between China and Africa provides opportunities - and challenges - to financial institutions

As trade between China and Africa, and investment from China in Africa, continue to soar, African banks are gaining more business from Chinese companies and individuals. However, language and cultural barriers continue to hinder collaboration between Chinese and African banks, raising the need for the African ones to employ Chinese or Chinese-speaking employees to bridge the differences and attract more business.

After growing more than 30 percent eight years in a row, trade between China and Africa soared to $106.8 billion in 2008. China has been Africa's largest trading partner since 2009, with trade worth $166.3 billion in 2011, nearly $200 billion in 2012 and 210.2 billion in 2013.

While foreign direct investment in Africa has fallen continuously since 2009, China's direct investment to Africa has grown significantly.

Direct investment flows from China to Africa rose from $1.44 billion to $2.52 billion between 2009 and 2012, increasing 20.5 percent a year on average, and the value of direct investment rose from $9.33 billion to $21.23 billion.

There are now more than 2,000 Chinese businesses in Africa, and the number is expected to surge in the near future as the Chinese government encourages more Chinese companies to invest in Africa, particularly in light of Beijing's One Belt One Road strategy to promote joint development among countries in Asia, Europe and Africa.

At the same time, many African banks are enjoying a boom in business with Chinese customers.

Standard Chartered Bank provides financial services and support to more than 70 Chinese customer groups across Africa, and its revenue from Chinese customers has grown by an average of more than 45 percent over the past three years. The bank has operations in 15 African countries.

Equity Bank Kenya has more than 1,000 Chinese customer accounts, and has extended loans totaling more than 10 billion Kenyan shillings ($109 million) to them. The bank plans to double its Chinese business base this year. Equity now also operates in five other African countries: Tanzania, Uganda, Rwanda, and South Sudan.

To better serve Chinese customers, Standard Chartered Bank Africa set up a China-Africa desk in its Johannesburg regional office in 2010.

"This dedicated resource is responsible for identifying, facilitating, managing and tracking our China-Africa business for the Africa region," says Philip Reynolds, head of global corporates for Africa, and head of corporates & institutional clients for Southern Africa.

The bank has a number of Chinese nationals working for it in Africa, 15 of them dedicated to supporting Chinese customers in its corporate, commercial and retail customer areas.

"These valued members of our team assist in overcoming any language or cultural barriers our Chinese customers may experience when doing business in Africa, and enable us to provide a more comprehensive and tailored level of service and understanding for our clients," Reynolds says.

"Nine Standard Chartered Bank markets in Africa have dedicated Chinese relationship managers or transaction banking specialists to provide a personalized level of advice and support to our Chinese clients in the region. All are obviously fluent in Mandarin."

Betty Tsai, regional account manager China corridor of Standard Chartered Bank, has worked for African banks since 2008.

"My career has been dedicated to dealing with the China-Africa side of things," she says. "There was a time when there was a lack of Mandarin speakers to service the market. The demand for them has risen as business between China and Africa has risen.

"Not only in Standard Chartered but in other banks, too, the number of Mandarin speakers has increased. They are not all necessarily from China. We don't bring in just our language expertise, we bring in our local knowledge, along with our banking expertise to help customers."

In one case the bank's Chinese section managed to assemble a local team consisting of relationship managers and product experts in just 10 days to help a Chinese customer find out about the market for cameras in a West African country, she says.

"We also travel to China because it's very important to know the need from both Africa and R&D in China to know what customers want."

Equity Bank Kenya recruited its first Chinese staff member in 2012 and now has three. The bank is trying to recruit 10 to 15 more native Chinese speakers with a background in finance to facilitate its business in its five African markets, says Raphael Hukai, a spokesman for the bank.

Recruitment is affected by restrictions on how many foreign employees the bank is allowed to have in the various countries, but more native Chinese speakers are likely to be needed in the future, he says.

About 10 Chinese nationals work in different banks in Nairobi.

"Chinese employees are playing a significant role in our organization and decision making," Hukai says. "They have the authority to conduct and direct business, and enjoy direct support from top management. Our Chinese employees are the key to connecting us to the Chinese community, and we are aggressively extending that capability.

"We want to be the champion of China-African social and economic collaboration, and we are very proud to be part of the African transformation of people's lives and livelihood."

Standard Chartered Bank, which has operated in Africa and China for more than 150 years, has recruited Chinese staff with banking skills through its "well-established network and reputation across both continents", Reynolds says.

"So it's all driven by demand. As the (Chinese) side of the business continues to grow, we will look at hiring more people."

houliqiang@chinadaily.com.cn

(China Daily Africa Weekly 03/20/2015 page16)