Bank of China-Zambia Ltd. headquarters in Lusaka (DERRICK SILIMINA)
China-Zambia diplomatic relations have a long history dating back to as early as 1964, and many cooperative milestones have been celebrated along the way. One that symbolizes the friendship and unity between the two nations is the recent two-decade anniversary of Bank of China (Zambia) Ltd. (BOC (Z) Ltd.).
As a fully-licensed bank branch, BOC (Z) Ltd. is headquartered in Lusaka and provides both corporate and personal services, including credit facilities, account services, international settlements, exchange services and Chinese renminbi (RMB) services.
BOC (Z) Ltd.'s existence in the country has withstood the test of time, and it is for this reason that the financial institution's quality services have enhanced its clientele network base. This has therefore helped bolster China's foreign direct investments (FDIs) in Zambia which has accumulated to $2.6 billion, with more than 500 Chinese companies investing in various sectors of the local economy.
Established in late 1997, BOC (Z) Ltd. is the first wholly-owned subsidiary of Bank of China (BOC) in Africa, and also the first Chinese financial institution on the continent.
"There is a very good relationship between China and Africa and between China and Zambia in particular. Therefore, we have seen the exchange of bilateral trade and economic treaties, and as a bank we think it contributes and facilitates such exchange. That is why BOC chose Zambia to be our first base in Africa two decades ago," Chinese Ambassador to Zambia Li Jie told ChinAfrica.
Financial banks such as BOC find Zambia a viable investment destination, as it enjoys comparable environment for cooperation thanks to the support of the Zambian Government, as well as the positive mentality of the people who are aligned to development and open to cooperation. These virtues make Zambia one of the countries in Africa to be attractive to Chinese investors. "This is very important for financial institutions to make their decisions to establish in a foreign country," said Li.
In regard to BOC's significant influence and reputation, as compared to other commercial banks in the country, Ambassador Li said the bank is attracting more Chinese investment to Zambia because of the background of Chinese culture and the increasing bilateral activities.
He said the unique services provided by BOC have borne fruit as there has been an increase in the number of Chinese investors in Zambia.
In a bid to promote China–Zambia economic relations, the Chinese envoy further said, "We have been very instrumental in facilitating imports and exports, in particular over the past 10 years, because of the increase in investments. We are also facilitating and providing services through those investments in terms of settlements and trade-related financing."
BOC (Z) Ltd. Managing Director Wang Qi (DERRICK SILIMINA)
Trading in RMB
The BOC ranked fifth in total assets among the 17 banks in Zambia in 2016, and in the last few years it has granted billions of dollars worth of loans to local mining, energy, infrastructure, public utilities and sanitation projects.
Zambian Vice President Inonge Wina, while attending the Zambia-China Week in China recently, hailed BOC and awarded the bank a certificate of appreciation for its contribution to Zambia's development.
And recently, China's central bank has appointed BOC to clear RMB transactions in Zambia, which is aimed at Chinese businesses operating in the country as well as Zambians importing goods from China.
BOC (Z) Ltd. Managing Director Wang Qi told ChinAfrica that this move will hasten bilateral trade for both countries and help create linkages to benefit their economies and further strengthen the friendly ties.
Wang said he believed that it was the bank's duty to lower the cost of currency exchange arising from the increasing economic activities between the two nations.
"So we brought in RMB so that Zambians could trade easily with China instead of using dollars or pounds and change them back to RMB."
Wang said the former transaction practice means higher costs to traders and customers. So by trading directly between Zambian and Chinese currencies, it will help reduce the exchange costs for both importers and exporters. This move further reduces the cost of goods, so that the public could pay less in terms of goods imported or exported by the two countries, he said.
Looking ahead to the coming September, when the Beijing Summit of the Forum on Africa-China Cooperation is to be held in Beijing, Wang said the summit will be very important because both China and Africa have really seen rapid and diversified economic growth lately.
"I am sure the Zambian Government will make full use of the opportunity to showcase Zambia to the Chinese business circles and increase their confidence in the country as their investment destination," said Wang.
(Reporting from Zambia)
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