China's biggest bank, the state-owned Industrial & Commercial Bank of China, is to buy a 20 per cent stake in Standard Bank Group, South Africa's biggest lender, for $5.5 billion. ICBC and Standard Bank agreed to serve each other's clients and support each other's international expansion plans. It will make ICBC the biggest shareholder in Standard Bank. “The parties shall be preferred partners and their cooperation is intended to be long-term and mutually beneficial,” the Chinese bank said in a statement issued through the Hong Kong Stock Exchange, where its shares are traded. ICBC, headquartered in Beijing, has CNY1.1 trillion ($144 billion) in assets and reported profits in 2006 of CNY49.3 billion. Standard Bank, headquartered in Johannesburg, operates in 38 countries and has assets of $119 billion. China is encouraging Chinese companies to invest abroad in what it calls a “go global” strategy to diversify the economy and take advantage of international opportunities. Chinese companies invested $21 billion abroad last year, according to the government. The Beijing government has made special efforts to develop ties with Africa as a potential source of energy, raw materials and markets for its economy. The deal will put the partners "at the crossroads of economic interaction between China and the African continent," Standard Bank said in a statement issued in Johannesburg. ICBC hopes to raise the foreign share of its business to 10 per cent from the current 3 per cent, chairman Jiang Jianqing said at a news conference. He said that could not come from the bank's internal growth alone, suggesting it plans more acquisitions. ICBC, which raised $21.9 billion in an initial public stock offering in October 2006, said last week it also plans to open a US branch and expand in Russia, Australia and the Middle East. The deal with Standard Bank is one of China's biggest foreign corporate acquisitions to date. It comes a week after a government-owned securities firm and US-based Bear Stearns agreed to invest $1 billion in each other and combine some Asian operations. The China Development Bank agreed in July to pay $3 billion for a stake in UK bank, Barclays, and, in May, a fund set up to invest part of China's vast foreign reserves agreed to pay $3 billion for a stake in US private equity firm Blackstone Group.