Over the past decade, Egypt’s ties with China have grown from strength to strength with China now becoming one of Egypt’s most important trade partners.

To put this in perspective, the number of Chinese companies operating in Egypt have exceeded 2k with investments totaling USD 8 bn across many sectors, including textile, home appliances, telecommunication, animal feed, and many more.

Beyond the trade investments, China has injected more than USD 16 bn into the Egyptian economy in the form of loans, investments and development projects, according to the Tahrir Institute for Middle East Policy (TIMEP).

China is ready to deepen cooperation with Egypt in various fields including economic and social development, import more high-quality products, and encourage more Chinese enterprises to invest in the country, Chinese Foreign Minister Wang Yi said in January.

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Egypt is North Africa’s biggest market, with a population of over 100 mn, which shows the huge opportunities for Chinese investors.

Infrastructure and construction projects in new Egyptian cities have drawn particular attention from Chinese investors, mainly in Egypt’s new administrative capital near Cairo, dominated by the 385-meter-high Iconic Tower, the tallest in Africa, and the Suez Canal Economic Zone (SCZone).

A showcase of Chinese trade partnerships, the SCZone attracted more than 140 companies and investment of over USD 1.6 bn by July 2023.

In March 2023, Hong Kong’s Hutchison Ports invested USD 700 mn in two Egyptian ports, bringing the company’s total investment in the country to over USD 1.5 bn.

China is Egypt’s biggest importer, with USD 17.2 bn in 2022, or 21.6% of total imports, according to the United Nations Comtrade database on international trade.

The IMF deal is expected to stimulate the whole trade corridor, giving a boost to both exports and imports between the two nations. ITC projections for 2027 show exports potential of USD 19.6 bn between China, including Hong Kong, and Egypt.

The main export sectors where the Chinese companies could benefit are electronic equipment, machinery and electricity, as well as chemicals, with estimated export gaps of USD 2.7 bn, USD 1.6 bn, and USD 636 mn, respectively, according to the ITC.

In the opposite direction, the Egyptian businesses could focus on exports of precious metals, plastics, and rubber, as well as chemicals to China with estimated export gaps of USD 130 mn, USD 84 mn, and USD 69 mn, respectively, the ITC says.

Over time, Chinese investments in Egypt have evolved from mainly focusing on contracting and infrastructure to manufacturing, including smartphone manufacturing, household appliances, and textiles.

Such export-oriented investments across several sectors are expected to boost Egypt’s exports, helping fulfill its ambition of becoming a regional export hub.

Also, the government’s strong support for renewables is paving the way for green-minded Chinese businesses.

This interest is already clear as the Egyptian government signed a memorandum of understanding with China Electric Power Equipment and Technology Company to develop a 10-gigawatt solar energy project. Also, the SCZONE signed USD 15.6 bn in agreements with Chinese partners for 11 manufacturing and green hydrogen projects.

Egypt has played an important role in China’s Belt and Road Initiative due to its strategic location that makes it a vital trade route connecting the Middle East and Africa. This is the right time for Egyptian businesses to accelerate dialogue and engagement with Chinese investors to showcase the expansive trade and investment opportunities the country has to offer.

As the largest international bank in Egypt and because of our long-standing heritage in China, HSBC is ideally positioned to serve the multi-dimensional needs of Chinese businesses looking to invest in the country’s fast-growing economy.

By Ali Taqi, Managing Director, Head of Commercial Banking, HSBC Bank Egypt

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