Current Date: 22 Feb, 2024

China and Egypt form a civil organization to encourage cross-border investment

The newly formed Egyptian-Chinese Entrepreneurs Association will support the expanding economic ties between Beijing and Cairo as China steps up its political engagement with the Middle Eastern allies of the United States.

Egypt and China established the Egyptian-Chinese Entrepreneurs Association to promote Chinese investment in Cairo. 

China and Egypt form a civil organization to encourage cross-border investment

The new association was formally established on November 28 at a ceremony held in Egypt's Administrative Capital in the presence of officials and businesspeople from Egypt and China, including Mohamed Maait, the Egyptian Finance Minister.

The head of the new association's board of trustees, Majd al-Din al-Manzalawi, told Al-Monitor that it is the first organization of its kind. The new civil society group, which will fall under the Ministry of Social Solidarity, will work to promote investments between the two nations.

Support is from the Egyptian government and in coordination with the Chinese Embassy in Egypt. 

The establishment of the association, according to Maait, was eagerly sought after by both the Egyptian government and the Chinese Embassy to strengthen their strategic partnership ties and create pathways for economic, commercial, and cultural cooperation between the two nations.

Given the positive reputation Chinese businesses operating in Egypt enjoy, he explained that the association is a new forum for communication between the two business communities. He added that they look forward to removing any hindrances to maximize investments.

According to Maait, Egypt has opened its doors to Chinese investments that have grown significantly over the past ten years. He added that Egypt recently received the largest share of Chinese assets in the Arab world, amounting to about $28.5 billion from 2018 to 2019.

According to him, this gain helped create 24,000 job opportunities in Egypt. Mait added that they intend to issue $500 million worth of Chinese yuan (Panda) bonds in the Chinese market.

The Suez Canal Economic Zone, particularly the Trade Cooperation Zone and the China-Egypt TEDA Suez Economic, has a role in progressing China's Belt and Road Initiative, according to the Egyptian minister. 

Maait asserts that about 140 Chinese companies are operating in the Egyptian market; 102 are located in the TEDA zone and have made investments totaling $1 billion.

Relations between Egypt and China have improved since President Abdel Fattah al-Sisi came to power in 2014. Sisi has made seven trips to Beijing and eight meetings with his Chinese counterpart Xi Jinping, the most recent of which was in February.

Egypt took part in the Silk Belt Road initiative upon its inception in 2017, and the two leaders signed an agreement on a strategic partnership between Egypt and China in 2014. 

Data from the Egyptian Finance Ministry show that during the first ten months of 2022, Egypt's imports from China totaled $12.1 billion, while its exports to China totaled $385 million.

$20.98 billion worth of trade was conducted between China and Egypt in 2021, an increase of 37.3% from the previous year.

Taking advantage of these good relations, Manzalawi said, the governments of both nations support our efforts to expand the economic and cultural cooperation between Egypt and China.

The recently established association will act as a launching pad for Chinese investors in Africa and the Middle East and Africa in line with the Belt and Road Initiative, according to Manzlawi.

According to economic analyst Ahmed Amin, who spoke to Al-Monitor, China wants to benefit from the many advantages of the sizable Egyptian market, which has more than 100 million consumers, and Egypt's status as a hub for trade in Africa and the Middle East.

Amin predicts that, shortly, Chinese investment in Egypt will increase. He continued that the two governments want to establish this association to remove barriers facing Chinese companies. Egypt also wanted to connect China and other nations.

The ECEA's board of trustees will be led by former League of Arab States secretary-general and current Egyptian foreign minister Amr Moussa.

Moussa said during the ceremony that the economic Belt and Road initiative between China and the Arab world had replaced colonial economic thinking with cooperative economic thinking regarding cooperation.

This can support the Egyptian-Chinese movement forward. He also stated the need to direct Chinese investments to establish joint industries, develop the Suez Canal, and export goods to the African market.

Nadia Helmy, a Beni Suef University political science professor who spoke to Al-Monitor, says that China views Egypt as a pillar of the Belt and Road Initiative. 

As a result, Helmy says, "Beijing has been encouraging its businesses to invest in Egypt over the past few years and has given Cairo significant political and financial support."

The Chinese Embassy in Cairo has recently increased its political activities. This is after the 20th National Congress of the Communist Party, China, in October, which granted the president a historic third term as the party's leader.

On November 3, Liao Liqiang, the Chinese ambassador to Cairo, convened a meeting with representatives of 14 Egyptian political parties and organizations. On November 10, a symposium was held to discuss the results of the party conference.

There was yet another conference with Arab diplomats in Cairo to plan for the summit between China and the Arab world during the Chinese president's trip to Riyadh later this month.

According to Liqiang, under the personal leadership of Xi and Sisi, relations between China and Egypt have developed into a comprehensive strategic partnership.

We can no longer hope on the US, so we must look to Russia or China as partners. 47% of Egyptians agreed with this statement, according to a Washington Institute poll conducted in September.

More than half of Egyptians place greater importance on their nation's relations with China than on the US.

As a result of Egypt's reconciliation with China, in Helmy's opinion, Cairo will be able to take part in and benefit from the BRICS summit. According to his office, the Egyptian president traveled to Riyadh on Thursday to attend the summit, where he met with Xi Jinping.

Mohammed Soliman, director of the Middle East Institute in Washington's Center for Strategy and Emerging Technology, told Almonitor that Egypt is a cornerstone of China's Middle East policy.

This also includes Saudi Arabia, the United Arab Emirates, and Israel. He added that the summit is an essential milestone for Chinese-Arab relations but is not fundamental or pivotal.

He said Washington is "laser-focused" on China's Middle Eastern activities and how they might affect US bilateral relations with other regional powers.

However, Arab states prioritize their interests in this era of great power competition, and the China-Middle Eastern summit should not be viewed as Arab capitals preferring China over the US.

Excellence Chukwuma Chukwunaedu

Excellence Chukwuma Chukwunaedu

I enjoy marketing, technology and business. I help businesses and brands connect with their ideal customer profiles and build products that excite them and solve their problems.