Absa Group, one of Africa’s largest diversified financial services companies, is strengthening its relations with Chinese firms as part of its global expansion strategy. This move comes amid increasing investment and trade between China and Africa.
Based in Johannesburg, South Africa, Absa will focus on fortifying relationships with state-owned entities, private companies, banks, and development finance organisations through its subsidiary, which officially launched in Beijing in early May. Klaus-Dieter Kaempfer, CEO of Absa China, elaborated on this strategy, stating, “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.”
With an established client base, Absa aims to enhance its presence and develop closer relationships with potential clients on the mainland. The Beijing office operates under a wholly foreign-owned enterprise licence, permitting it to provide general advisory services and research to Chinese clients for transactions across Africa.
Kaempfer clarified, “To be clear, we are not conducting business in China, and we’re not doing domestic business. 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 initially revealed by Zhu Kai, principal and head of China Corridor at Absa Corporate and Investment Bank, in May of the previous year. The office’s opening was scheduled for the end of 2023, but delays in obtaining the necessary licence until December, followed by the hiring of a team, postponed the launch to last month.
China’s total trade with Africa rose by 1.5 per cent year on year in 2023 to $282.1 billion, while the continent’s trade deficit with the world’s second-largest economy expanded by 36.4 per cent to $65 billion, according to Chinese customs data published in February. Furthermore, China’s total investments in Africa reached nearly $11 billion in 2023, marking its highest level since at least 2005, according to data from the American Enterprise Institute, a Washington-based think tank.
“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,” Kaempfer remarked. Absa boasts a robust presence across several sectors, including renewable energy, mining, minerals, trade finance, and debt.
As Sino-African trade and investment continue to grow, Absa’s strategic move to bolster ties with Chinese firms positions it to play a pivotal role in facilitating transactions and fostering economic partnerships between the two regions.
