A worker inspects solar panels at the Abydos Solar PV Plant in Aswan, Egypt, on Nov 24. The project's general contractor is China Energy Engineering Corporation. SUI XIANKAI/XINHUA
Chinese investment is crucial to Egypt's economic development, especially with Western investors shying away, observers said, as they anticipate more mutually beneficial investment and technology cooperation between both countries.
Diaa Helmy, secretary-general of the Egyptian-Chinese Chamber of Commerce, highlighted the significance of recent cooperation agreements with China.
"These deals not only signal a rise in Chinese investment, but also mark China's approval to share advanced technologies with Egypt. This aligns with the Egyptian leadership's push for industrial localization," he said.
According to Helmy, Chinese investments are critically important for Egypt's economy.
"While some Western countries have shied away from investing in certain Egyptian tech sectors, China has become a lifeline for the country. Egypt is actively seeking to localize these technologies, particularly in sectors like electric and conventional car manufacturing, satellite development, data centers, and 5G communication," he added.
In recent years, the flow of Chinese projects in Egypt has accelerated significantly, fueled by a strong political determination within the country to attract Chinese investments.
One of the latest projects was the establishment of a car factory by Chinese automaker Geely near the Egyptian capital of Cairo, which is the first of its kind in the Middle East and Africa. The factory started production of cars in January, and it is expected that 30,000 vehicles will be manufactured in the factory annually over the next few years.
Also, in December, Egypt's Suez Wind Energy signed an agreement with Power Construction Corporation of China to build a 1,100-megawatt wind farm in the Gulf of Suez. Once completed, the wind farm will become one of the biggest of its kind in Africa.
Ali El-Hefny, the former Egyptian ambassador to China who also served as assistant foreign minister of Egypt, said China has become one of the largest investors in Egypt. He said growing Chinese investment in Egypt is a direct result of the strong and strategic partnership between the two countries. This partnership was strengthened in 2013, following Egypt's participation in China's Belt and Road Initiative.
The two countries have also launched the China-Egypt TEDA Suez Economic and Trade Cooperation Zone project, located near the Suez Canal. This ambitious project aims to replicate the success of Tianjin, a major industrial hub in China.
Ahmed Radwan, CEO of Egypt-TEDA Investment Company, said that the TEDA zone currently hosts approximately 170 industrial and service sector companies, with a target of reaching 200 by the end of 2025.
Tech industries
Radwan confirmed that China is bringing technology-oriented industries to Egypt, such as renewable energy and steel production.
He highlighted the diversity of Chinese investments and projects in this initiative, including industries such as "textiles, home appliances, chemicals, petroleum equipment, high and low-pressure equipment, building materials, solar panel industries, motorcycle and tuk-tuk manufacturing, and mobile technology".
According to Egypt's Ministry of Investment, by June 2024, Chinese investments in the TEDA zone had surpassed $3 billion.
Official Egyptian data also reveal a significant surge in Chinese investments and trade between the two nations last year.
According to the Central Agency for Public Mobilization and Statistics, Chinese investments in Egypt increased by a substantial $443 million in the first half of the 2023-24 fiscal year.
The General Authority for Investment and Free Zones in Egypt confirmed this growth, stating that as of October 2024, more than 2,000 Chinese companies operated in Egypt, with total investments reaching a significant $8 billion.
Chinese companies are also responsible for developing the central business district in Egypt's New Administrative Capital, which the Egyptian government envisions as its future economic hub.
Helmy of the Egyptian-Chinese Chamber of Commerce said the Egyptian market also offers "promising opportunities" for Chinese investors.
"For China, this collaboration guarantees promising opportunities in the vast Egyptian market, as well as in all of Africa," Helmy explained.
The writer is a freelance journalist for China Daily.
