China's Superbank by Henry Sanderson & Michael Forsythe

Author:Henry Sanderson & Michael Forsythe
Language: eng
Format: epub
Publisher: Wiley
Published: 2012-09-27T04:00:00+00:00

China–Africa Development Fund: The State’s Private Equity Arm

On a sunny day in November 2006, Beijing made an extra effort to welcome 48 African leaders: Billboards throughout the city announced Africa as “the land of myth and miracle,” and high-rises were covered with pictures of elephants and giraffes, a gesture the government thought would make African leaders more at home.18 Robert Mugabe, president of Zimbabwe, was quoted by state news agency Xinhua as saying that the summit would enhance cooperation: “We have nothing to lose but out imperialist chains.”19 President Hu Jintao promised to establish up to five special economic zones in Africa and to start a new $5 billion fund, the CADF, among other measures, to boost investment by Chinese firms and offshore some of China’s manufacturing. Where would the money come from? CDB, which can get money cheaply from the bond markets, as we saw in Chapter 2, turned out to be the best answer. Despite attempts at outside fundraising, CDB has provided all the funding for CADF.

Set on the main east–west avenue in Beijing in a new glass office building just steps from the central bank—the same building as Thomson Reuters and Exim Bank—CADF’s smart offices give the air of a sleek investment operation, where well-suited Africans are sometimes seen in the lobby near the Costa Coffee café. The fund was formed at a ceremony in the Great Hall of the People in June 2007, attended by Commerce Minister Bo Xilai, Foreign Minister Yang Jiechi, former foreign minister Tang Jiaxuan, and Gao Jian, vice governor of CDB.

Chi Jianxin, the head of the fund, has a large map of the world with China at the center in his Beijing office. A short, academic man with a considered manner, he sat down for an interview in late 2011 in a meeting room with a plush carpet with the logo of the fund emblazoned in the center. Paintings on the wall showed African landscapes portrayed in the traditional Chinese style of rivers and mountains. Other staff members who spoke fluent French and lived in West Africa sat around him. Chi himself has long experience with CDB. According to a photo of the event, Chi was there the night of the Wuhu financing signing that created China’s local government financing vehicles. But he is relatively new to Africa: He first visited in September 2007, after becoming the fund’s chief executive. Those who work with the fund consider it to be commercially motivated and professional. “It’s a very gung-ho private equity fund,” said Martyn Davies, head of Frontier Securities in South Africa. “I find the guys extremely helpful and very good and very professional to deal with. I wouldn’t use words like shadowy. It’s largely commercially driven.”20

The fund opened its first West African office in November 2011 in Ghana, its fourth regional site in Africa. It also has offices in South Africa, Ethiopia, and Zambia and is the only Chinese private equity fund investing in the continent. A 2011 Xinhua article quoted company

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