BRI & Sino-Egyptian Strategic Partnership: An Expert Opinion | By Dr Mehmood Ul Hassan Khan


BRI & Sino-Egyptian Strategic Partnership: An Expert Opinion

Egypt was the first nation from the Arab world to establish official diplomatic ties with China in 1956 and One Belt & One Road Initiative (BRI) has now further strengthened Sino-Egyptian bilateral relations in terms of infrastructural development, energy, investment, trade and transportation.

In this connection, according to the Chinese official data (December 20210, its investment in Egypt has surpassed US$24.3 billion. A considerable portion has been diverted to four high profile BRI-backed projects: mainly, the construction of the country’s new administrative capital, the expansion of the Suez Canal Economic Zone, the New Alamein City in northwestern Egypt and the Electric Train Project at the new 10th of Ramadan City. Moreover, Sisi’s Egypt Vision 2030 and Xi’s BRI have mutually supported each other. Egypt has a unique geographic location and economic diversification enabling it to assist China in advancing the BRI throughout the Middle East.

China is also Egypt’s main import partner (US$13.3 billion as of 2022). The two countries will soon focus on cooperation in strategic industries such as AI, space technology and e-commerce under the flagship project of the BRI. Moreover, it has been Egypt’s largest trading partner for eight consecutive years, as the volume of trade exchange between the two countries reached US$20 billion by 2021, an increase of 37 percent.

Bilateral trade between China and Egypt is currently running at about US$2 billion per month. The main products that China exports to Egypt are Broadcasting Equipment, Non-Retail Synthetic Filament Yarn, and LCDs, while Egyptian exports focus on Crude Petroleum, Refined Petroleum, and Citrus and other foodstuffs.

For the further development of blue economy and maritime cooperation, most recently the Egyptian government signed a Memorandum of Understanding (MoU) with Hutchison Ports a subsidiary of CK Hutchison, with regard to the construction of a container terminal at the port of Abu Qir on the country’s Mediterranean coast which clearly shows the increasingly close China Egypt ties, with the relationship having blossomed since the launch of the BRI.

Egypt is now the third biggest producer of fiberglass in the world because of the Sino-Egypt sponsored and built Suez Economic and Trade Cooperation Zone (SETCZ), which is by far the largest Chinese manufacturing initiative in Egypt in terms of investment volume. In this regard, the expansion of the Suez Canal for maritime and inland transportation is the top priority in the incumbent Egyptian government’s Egypt Vision 2030, which entered its implementation phase in February 2016 and aligns with the BRI’s goals in the region.

With regard to the latter project, the Suez Canal Economic Zone, Tianjin Economic-Technological Development Area Holdings committed to spending about $5 billion on expanding the facility. It is envisaged that, once completed, the zone will function as one of the region’s primary logistics hubs and be fully integrated with a number of existing BRI projects.

The Central Business District (CBD) project in the new administrative capital city is among major infrastructure projects in Egypt’s construction, energy, transport, commerce, and industrial sectors where China has played a significant role. Since March 2018, the China State Construction Engineering Company (CSCEC) has been working on the CBD and it is by far the biggest infrastructure undertaking in Egypt.

The Egyptian government has also worked to strengthen its economic ties with China to advance Egypt’s industrialization. Both countries also established deeper financial ties. Many Egyptian-funded banks, as well as Egyptian-foreign equity joint banks, offer Renminbi (RMB) and Egyptian Pound (EGP) exchange services as of 2022, and their ATMs recognize UnionPay cards.

The China Development Bank (CDB) also provided loans of US$1.4 billion to Egyptian financial institutions that year, of which US$900 million went to the Central Bank of Egypt.

Bilateral cooperation between China and Egypt is expanding to new sectors such as the so-called “Digital BRI”. Now both countries have also decided to intensify their cooperation in satellite development, satellite launch, telemetry tracking & command (TT&C), satellite application, and data sharing.

China supports Egypt’s plans to build its space capability and produce remote sensing and communication satellites. The agreement between Egypt’s National Remote Sensing Space Science Bureau and China’s National Space Administration further strengthened the sharing of satellite monitoring data in resource exploration, environmental monitoring, crop yield estimation, and other areas, raising the level of space cooperation between the two countries.

Interestingly, China is also assisting Egypt in getting ready to hold a UN climate change conference in the Red Sea city of Sharm el-Sheikh, while the General Authority for Investment and Free Zones in Egypt co-signed an agreement with the Chinese firm Haier Group Corporation for the construction of an industrial complex for the manufacture of home appliances.

Egypt’s Information Technology Industry Development Agency and Chinese tech giant Huawei have closed a deal to collaborate in selecting Egyptian businesses that will receive technical help, cloud, and artificial intelligence technology training from Huawei primarily targeting businesses in sectors such as AI, data management, gaming, and e-commerce.

To conclude, increasing Sino-Egyptian bilateral relations have transformed its macro-economy, accelerated social development, built free economic zone and last but not least, started massive industrialization under the flagship project of the BRI.

The Chinese have already designated Egypt as one of the top five countries for mergers and acquisitions potential over the next five years. The two countries have also strengthened their relationship to a “strategic partnership”.

The Egyptian government is executing 35 projects in Sharm El-Sheikh ahead of the UN Climate Change Conference 2022 (COP27) which shows it’s potential in green energies which should be further consolidated under the flagship project of the BRI in the country.

Its green projects include the development of the central garden according to sustainability standards, along with the launch of a group of green sustainable hotels, transition to electric transport, and switching to the use of new and renewable energy. The government is also setting a new system for solid waste management in partnership with the private sector.

Sisi has announced serious steps to apply a sustainable development model that aims for government-funded green projects to reach 50 percent by 2025 and 100 percent by 2030. Egypt has started implementing serious steps to transform its activities into environmentally friendly activities, such as waste recycling, by tapping on eco-friendly technology in industry and relying on cars operating on gas and electricity instead of gasoline. The Chinese BRI will play an important role in the future socio-economic development of Egypt.

Cooperation in oil & gas, wind & solar, hydro-power generation, artificial intelligence, IT, ICT, social modernization, health, community development, agriculture, industrialization, blue economy and last but not least, banking & finance would be game changer for the sustainable development of the Sino-Egyptian and BRI in the days to come.

Moreover, cooperation in education, culture, tourism, SMEs, climate change, e-commerce, smart cities, manufacturing production capacity, public transport and passenger vehicle manufacturing industrial zones, free trade zones, financial centers, textiles, garments, apparel, mining, electronics and land & maritime transport cooperation would further foster Sino-Egyptian bilateral relations under the flagship projects of the BRI in the country.

Sino-Egyptian relations have become a model of solidarity, cooperation and mutually beneficial under the leadership of the two heads of state. China and Egypt are the two ancient civilizations of the world and now are moving towards ideal hubs of trans-regional connectivity and infrastructural development under BRI.

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