Rabobank, one of the first foreign bank to invest in a Chinese rural cooperative bank, aims to become a leading player that serves the nation's food and agricultural industries in the next five years and beyond.
The Netherlands-based bank, which has grown quickly in China, looks to gain the largest market share in the relevant sectors and serve the leading players in food and agricultural businesses.
"China has the largest agricultural and food output in the world," said Orlando Wang, general manager of the bank's Shanghai branch. "We have reached partnerships with some top players in the nation's food processing sector including sugar, animal protein, edible oil and grain."
With two offices on the Chinese mainland, Rabobank established its first representative office in Shanghai in 1994 and a representative office in Beijing one year later. And the Shanghai office was incorporated into a subsidiary in 1998, which later was converted to a fully licensed branch at the end of 2003.
Drawing on Rabobank Group's unrivaled global expertise and research in food and agribusiness (F&A), the lender shares its knowledge of the F&A sector which adds great value in providing good service to Chinese clients.
The core competencies of Rabobank in China are reflected in products such as corporate lending in renminbi and foreign currency, global financial market products, and structured trade and commodity finance.
Currently the bank employs about 60 staff in China and the majority of its clients are Chinese companies.
For the years to come, the Dutch lender looks set to gain from the rapid development of China's food and agricultural businesses and seeks business ties with top five players in each sector in the industry.
"The fast growth of the food and agricultural business in China is obvious to all," Wang said.
For example, demand for dairy products in China, Asia's second-largest dairy market, more than doubled in the past five years to more than 25 million metric tons of liquid milk equivalent in 2005.
Despite the recent melamine-contaminated milk powder incident, the nation's dairy business is regaining vitality and Wang sees positive factors in the government's efforts to secure food safety.
"Now the incident is turning toward a positive direction," he said, adding that his bank is safe in the whirlwind because little exposure was made to enterprises deeply hurt by the incident.
As part of its growth strategy in China, Rabobank is keen to invest in the nation's rural financial institutions, eyeing the tremendous growth potential of China's less developed areas.
In 2006, the lender secured a 10 percent stake in the United Rural Cooperative Bank (URCB) of Hangzhou, marking the first foreign equity participation in a Chinese rural cooperative bank.
Besides financial investment, Rabobank provides management and technical support to help modernize the cooperative bank. It also has a deputy director in URCB.
"Our partnership with URCB is a successful one and the following cooperation will follow suit," Wang said. "It's important that our partners recognize our values, abilities and long history in F&A and business mode."
The financial sector in China's rural areas will be stronger, as the gap between urban and rural areas will finally be narrowed, Wang said.
The nation has set a goal of doubling per capita disposable income of rural residents by 2020 from the 2008 level. The government will substantially boost consumption of rural residents and eliminate poverty in rural areas by 2020, China's top decision-makers announced at the recent third Plenary Session of the 17th Central Committee of the Communist Party of China (CPC).
In the communique, the CPC central committee promised to allot more government funds to public services in rural areas, including education, healthcare, employment, housing and pension. Agriculture will be modernized in tandem with rural progress, and agricultural productivity will be raised, with national grain security and product supplies ensured.
As to Rabobank's position in the current turbulent financial market, Wang stressed "Rabobank is in good shape. It is, in fact, rock solid. This is the result of 100 years of frugal banking.
Source: China Daily
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