Cross-Border Cash-Management Platform Built for Africa-China Commerce
Financial markets have been taking an increasingly larger portion of the global GDP, and is moving across borders and faster and smoother rates than before. Electronic financing through the internet opened an entire new world to investors and financiers who are now able to move money from one bank or company to the next in milliseconds.
We are currently seeing an increase in cross-border investment and as such are seeing many innovations to ease the risk involved with doing business in a foreign country. Most, if not all, developing countries do not have legal structures that ensure a foreign investor will be treated the same as a homegrown investor. A chinese investor in Africa needs to be ensured that they can access information about their investments as easily as if they were investing in China, and that their money is safe. Otherwise the risk of doing business in Africa is perhaps not worth the potential benefits.
"The China-Africa cross-border cash-management platform, jointly developed by the Standard Bank of South Africa and Industrial and Commercial Bank of China (ICBC), is the first financial product that serves cross-border cash management between China and Africa, opening the new model of direct China-Africa cross-border cash management. It enables headquarters of Chinese enterprises to know account information of their African branches by real-time ICBC online banking and manage the changes in internal funds to achieve unified payment management at headquarters. It will reduce payment costs, and assist them in controlling risk."
Implications from Institute for the Future:
As cross-border investments increase, more platforms to ease and secure associated financial transactions will be built; as these platforms are built, there will be an increased interest in cross-border investment.
China's activities in Africa are not a short-term trend, and many of the steps that are being taken to ease ability to conduct cross-border business will lower the barrier of entry for less powerful economies to follow suite in the future.
Increased business activity may mean increased access to opportunities which have traditionally been out of reach for poor and marginalized communities.
Sources:South Africa Node October 2010, pg. 3: