CAIRO -- China has invested heavily in Egypt in recent years, to the tune of more than $7 billion, but analysts warn that this level of Chinese involvement in key locations and economic sectors may have dire long-term consequences.
Of particular concern are the massive investments China is pursuing in the Suez Canal economic zone, economists and strategic analysts told Al-Mashareq.
The expansion of Chinese investment in recent years goes far beyond economic development, they said, and is reflective of the Chinese government's plans to dominate various parts of the Mediterranean and Africa.
According to the DocksTheFuture project, China's Belt and Road Initiative (BRI) includes plans to develop a "maritime Silk Road" that connects China to the Mediterranean via the South China Sea, Indian Ocean and Suez Canal.
"The project involves investments in port areas and inland logistic and industrial facilities along these maritime routes," DocksTheFuture said in a November 2020 report, noting that it is slated to be wholly completed by 2049.
"According to some estimates, China will spend around $1,000 billion in the next 10 years to implement the initiative," it said. "The financial resources required would total around $8,000 billion over the entire investment period."
China already has constructed a series of ports along the Indian Ocean, creating a necklace of refuelling and resupply stations from the South China Sea to the Suez Canal, according to a July 11, 2020, report in the New York Times.
Ostensibly commercial in nature, the ports potentially have military value, too, allowing China's rapidly growing navy to expand its reach.
China's economic incursion into the Suez Canal industrial zone may seem to be a commonplace foreign investment, but the issue has a worrisome strategic dimension, Egyptian waterways specialist Rifaat al-Arab told Al-Mashareq.
He said the investment is being pursued according to a plan developed by the Chinese to serve China's expansionist goals to penetrate multiple regions.
It also seeks to establish support bases for Chinese naval units deployed to areas in the Black Sea and some scattered bases in African countries such as Somalia, he added.
Al-Arab said the continued injection of Chinese investments into the Suez Canal area may well have negative repercussions in the future, and could undermine stability in the region.
Others note that China's treatment of its Muslim population in Xinjiang raises concerns for many in Egypt, a majority Muslim country.
Egypt central to China's plans
"Egypt is the hub of China's Middle Eastern policy," Fudan University professor Degang Sun said in a March 15 statement to Al-Jazeera.
China has been heavily involved in the construction of Egypt's New Administrative Capital, where the Chinese State Construction and Engineering Company (CSCEC) is building the Central Business District.
Chinese banks are financing roughly 85% of the $3 billion project, according to Al-Jazeera, which includes 20 towers, one of which will be the highest building in Africa when construction is completed.
"China, through several companies, was able to penetrate the Egyptian market, especially after the opening of the Suez Canal economic zone," financial analyst and Cairo University professor Mahmoud Sultan told Al-Mashareq.
These include Chinese-owned Media Egypt, for example, he said, as well as TEDA Egypt, owned by the Chinese state, both of which operate in the Suez Canal economic zone.
Sultan said production lines have started operating and are producing electronic products that Chinese companies intend to market in Egypt, the Middle East and Europe.
Suez Canal industrial park investments will provide opportunities for Chinese companies to enter markets in Egypt at costs that are much lower than the costs they incurred with exports from Chinese territory, he said.
China expanding its footprint
China now has a stake in many sectors of the Egyptian economy, Sultan said.
More than 1,500 Chinese firms are registered in Egypt, according to an October 26, 2020, report by the Middle East Institute (MEI), with Sino-Egyptian economic co-operation expanding in scope in recent years.
According to the MEI, "infrastructure construction and the enhancement of manufacturing production capacity have emerged as the most prominent features of Sino-Egyptian economic co-operation".
"The Chinese business presence in Egypt is concentrated in industrial zones, free trade zones and financial centres," it said. "Since the late 2000s, Chinese firms have shown interest in Egypt serving as a regional manufacturing hub."
"This is not surprising, given that the Suez Canal is China's primary shipping route to its largest market, Europe," it noted. "Nor, therefore, is it surprising that China is the largest investor in the Suez Canal Corridor."
Sultan said Chinese investments in Egypt include "a $1.8 billion co-operation portfolio that includes many development projects in the areas of electricity, health, education and vocational training".
But he cautioned that China's involvement also includes satellite and military co-operation, which may have undesirable security consequences for Egypt and the region.
Under the guise of its BRI, China is "trying to tighten the stranglehold around many areas outside its borders", said Ain Shams University professor Sayed Abdel Ghani.
This gives it "freedom of action and other advantages", he said.
By playing the investment card, Beijing is expanding its intelligence footprint on a very large scale, he said.
He stressed the significance of the Suez Canal for the global economy, noting that it also serves as one of the world's principal strategic and military corridors.
First, based on the above, we see two figures related to China’s massive investments in Egypt in recent years. The first figure is $7 billion, and the other, which is China’s planned investments in the Suez Canal, is $3 billion. This is according to al-Jazeera sources. In 2021, Egypt paid $17 billion in installments as per the bulletin of the International Monetary Fund. This means that it’s double what China has invested in recent years and what it plans to invest in the future. Second, the report shows a very important point, which is the importance of Suez Canal for global trade and China in particular. This is a positive thing due to the importance of the Canal and the insight of Egypt’s political administration in digging the new canal. That administration was sincere when it said that it was a gift to the world. This was very clear when the Evergreen vessel blocked the canal and affected global economies and trade. Third, the administration was one step ahead of the world in digging the new canal; the world was surprised at that time and insisted that it was not necessary for a country that was suffering economically. Now, they fully understand the administration’s insight. Egypt’s administration has the necessary experience to manage its economic, political and military files well. May Allah protect the leadership and people of Egypt despite hating, envious, conspiring and absent-minded people whether inside or outside Egypt.Reply
They hate the mother of world. They hate to see any progress or renaissance in Egypt. They’ll die of their jealousy.Reply
I agree with the concerns expressed in the report. China is a colonial country occupying the Muslim eastern Turkestan where it’s torturing its people. It’s also occupying Tibet. We also don’t forget its support for the regimes of Bashar and Iran, and its use of Veto against any resolution condemning The Syrian regime for its crimes. The people of Egypt must realise the extent of threat from China.Reply
The entire article is an attempt to create confusion and agitate feelings. What do the two countries’ relations have to do with China’s Muslims? What do economic relations have to do with military aspects? Your malicious intent behind the article is clear from your last request, which is to stage protests and demonstrations. You smell like stinky Muslim Brotherhood!Reply