Egypt confirms its strategic and historical positioning with China

The signing of a “comprehensive strategic partnership” agreement in 2014 led to a deepening of commercial cooperation (67% growth in trade volume), with China positioning itself as Egypt’s third trading partner (USD 13.3 billion). in 2022/23), and leading supplier for more than a decade (14% of imports, USD 11.5 billion). The trade balance between Cairo and Beijing, however, remains unbalanced in favor of China (USD 9.7 billion), which exports a wide variety of products, while Egyptian exports are mainly concentrated on hydrocarbons (nearly 60%).

In addition, the number of Chinese companies would reach 2,066 in February 2023, with an investment stock of USD 8 billion according to the General Authority for Investments and Free Zones (GAFI).

Investment projects are mainly concentrated in the telecommunications (Huawei) and port logistics (Hutchison Ports, COSCO Shipping Ports) sectors, with a recent diversification in the last decade towards energy (construction of a ammonia and hydrogen) and urban development (business district of the New administrative capital).

The Sino-Egyptian partnership is often highlighted in light of the New Silk Roads (BRI) project, due to the central point represented by the Suez Canal (60% of Chinese exports to Europe and one of Egypt’s main currency annuities with USD 8.8 billion in 2022/23).

Housing a commercial cooperation zone managed by the Chinese manufacturer TEDA, this international industrial and logistics hub offers Chinese companies present export opportunities to numerous Arab, African and European countries with which Egypt has concluded free trade agreements. -exchange. Egypt is thus the 7th most attractive destination for the expansion of investments in supply chains according to the China Going Global Investment Index.

Finally, China’s growing financial assistance is welcome in the face of the difficulties of the Egyptian economy.

Since 2016, China’s weight in Egyptian external debt has increased significantly (4.8% at the end of September 2023, compared to 6.8% for Paris Club creditor countries), in the form of medium/long term loans. or even more short-term support with the signing of a USD 2.7 billion currency swap (November 2016), a debt conversion agreement (October 2023) or even project financing by the Bank of China Development Bank (CDB) and the China Export-Import Bank (Eximbank).

Egypt is for its part a founding member of the Asian Infrastructure Investment Bank (AIIB), and the largest beneficiary on the African continent in terms of number of projects (7 between 2016 and 2023, 1.6 billion USD in total ). Finally, Egypt closed its first issue of “panda” bonds worth RMB 3.5 billion (USD 478.7 million) in October 2023, becoming the first African country to issue on the Chinese market.

Source: French Embassy in Egypt