CAIRO- Economic relations between Egypt and China are witnessing a fundamental shift, and Beijing (the first commercial partner of Egypt) strengthens its investment presence in a remarkable way, with the total Chinese direct investments reaching 9 billion dollars by the end of 2024 through the activity of more than two thousand Chinese companies covering strategic sectors.
In an effort to enhance the bonds of economic and investment cooperation, Cairo hosted a recent Chinese Egyptian investment forum with the aim of enhancing economic cooperation, and the Chinese delegation included 37 investors representing 23 major companies in the weaving and weaving sector, as reported on the official page of the Ministry of Investment and Foreign Trade.
This trend reflects a Chinese awareness of Egypt’s unique economic site as a bridge between Africa and Europe, and its wealth from youth and natural resources, but at the same time it raises urgent questions about the balance between mutual benefits and protecting the local economy.
Double partnership or consumer market?
On the one hand, Chinese investments in vital sectors such as infrastructure, technology and manufacturing are a major motivation to achieve Egypt’s development goals, and on the other hand, fears of the repercussions of “Chinese expansion” on emerging local industries, such as unequal competition, or Egypt turning into a consumer market for ready products instead of a regional center for production.
In October 2023, China agreed to a unique program to exchange debt with Egypt, according to which a memorandum of understanding was signed aimed at converting debt owed to Beijing to financing green development projects in Egypt.
China investment map
The map of Chinese investment in Egypt extends through multiple strategic sites, starting from the Economic Zone of the Suez Canal in the east, through the new administrative capital, Cairo and new cities, up to the new Alamein in the west, to include vital economic sectors such as energy, industry, technology, agriculture, and others.
During the past two years, the Suez Canal Economic Zone has succeeded in attracting 128 investment projects with a total value of 6 billion dollars, formed Chinese investments, including 40%.
- About 9.4 billion dollars Egypt’s debts to China 2024/2023.
- About 2066 Chinese companies in Egypt in various sectors.
- $ 15.5 billion agreements in the economic zone of the Suez Canal (Teda) at the end of 2023.
- Approximately $ 17 billion Egypt imports from China.
- About $ 500 million Egyptian exports to China.
- There is an Egyptian -Chinese alliance to grow a million acres with $ 7 billion investments.
- China is financed and the tower known as the “iconic tower” in the new administrative capital in Egypt through a loan of $ 3 billion through the Chinese company “Cesc”.
Why Egypt?
Mustafa Ibrahim, Vice -President of the Egyptian Chinese Business Council at the Egyptian Businessmen Association, attributes the significant increase in Chinese investments in Egypt to several attractive factors, most notably the competitive advantages of the Egyptian market in terms of its consumer size and strategic location as a continental transit gate, the competitive cost of employment, and the diversity of partnership opportunities.
Ibrahim tells Al -Jazeera Net that the international challenges facing China, such as the pressure of the fees battle with America and Europe, and the reduction plans for emissions, lead it to search for alternative markets for investment, indicating that Egypt represents a strategic location that allows China access to wide global markets.
Advantages of exceeding challenges
The spokesman emphasized the flexibility of Chinese investments and its strategic value of Egypt for not being linked to political conditions, pointing to the diversity of the attractive sectors, such as infrastructure, energy, industry, technology and agriculture.
He explained that the current Chinese investment in Egypt is estimated at $ 9 billion, with expectations of rapid growth that makes it one of the fastest foreign direct investments in the country.
Ibrahim reduced concerns about the impact of these investments on local industries, explaining that China often built factories in Egypt, in a way that does not constitute a direct threat to existing industries, but rather benefits from local workers and avoids Chinese companies customs costs.
He said that “the total advantages of this economic partnership exceeds any possible challenges, and open broad prospects for cooperation and partnership between the two sides.”
A big player
The battle of the burning global tariffs is part of the strengthening of Beijing’s trend towards increasing investment in Egypt, according to the statements of Ibrahim Mustafa Abdel Khaleq, Vice -President of the General Authority of the Economic Zone of the Suez Canal, which explained that “the unique geo -economic advantages of Egypt were manifested in China’s keenness to exist with major projects within the economic zone of the Suez Canal that provide important tax and customs advantages.”
Abdel -Khaleq explained to Al -Jazeera Net that the increasing momentum of Chinese investment in Egypt is driven by political and economic factors. On the political level, relations between the two countries enjoy stability, while economically, the Egyptian investment climate is considered “attractive to a decrease in the investment cost and the availability of free trade agreements that allow the arrival of Chinese products manufactured in Egypt to global markets without customs duties,” he said.
The most important characteristic of the Chinese investor – according to the former Egyptian official – is that he often enters the Egyptian market with its advanced technologies and integrated production tools and self -financing, which reduces the need for local borrowing and provides favorable conditions for achieving strong and sustainable economic growth rates by stimulating the movement of trade, investment, production and export.
Advantages to China and benefits for Egypt
In turn, the economist excluded the idea of damaging local industries from Chinese investments, noting that the Egyptian market depends heavily on imports from China, which amounts to about 16 billion dollars, and believes that the increase in Chinese manufacturing in Egypt will contribute to reducing the import bill and providing hard currency.
Abdel -Khaleq concluded his speech by emphasizing Egypt’s great benefit from enhancing economic cooperation with China, as it attracts improving the investment climate and developing infrastructure and linking it to the ports of foreign direct investment, which provides job opportunities and meets local demand and enhances exports.
