Why Egypt is significant to Belt and Road Initiative
In his speech at the BRI Summit in China, President Abdel Fatah al-Sisi highlighted on Friday that the goals of the initiative correspond to the efforts deployed by Egypt to launch a number of mega projects having high ROI and offering diverse investment opportunities. The president stated that on top of those projects is the Suez Canal Economic Zone (SCzone) that is an industrial, trade, and logistics center.
The president explained that SCzone provides “promising opportunities” for Chinese companies, other member states of the initiative, and all countries worldwide opting for benefits of Egypt’s strategic location. The chief of state added that SCzone can be a center for the production and re-export of goods to the entire world, particularly to the Arab, African and European states linked with Egypt via free trade agreements.
The Belt and Road Initiative was launched by the Chinese government to enhance trade, investments, and infrastructure in more than 150 countries in Asia, Europe, Middle East, Africa, and Latin America. The initiative is a revival to what was known as “The Silk Road.”
Vice-chairman of the SCzone Mahfouz Marzouk told CGTN in a TV interview last year that the Suez Canal has a basket of currencies that now includes yuan transactions which will create balance in international markets. Yuan is currently used in vessels and shipping services only but there are studies to use it in other sectors in the future since Egypt seeks different sources of hard currency.
TEDA Chinese Industrial city received 13.5 square kilometers southern the canal in 2015. Chinese investors finished the infrastructure, and established 65 logistic entities and 33 industrial entities including Jushi, the largest fiberglass factory in the world. The size of Chinese investments in the zone is $1 billion, and there is a deal signed for a new factory worth $800 million, Marzouk revealed.
CAIRO - 9 January 2018: Chinese fiberglass company Jushi started working on the fourth phase of its production cycle of fiberglass in Egypt, Minister of Industry and Foreign Trade Tarek Kabil announced Tuesday. "The fourth phase includes grinding raw material and manufacturing packaging materials," Kabil said, stating that the actual operations of Jushi's facility will start in the next few months.
The BRI will contribute to upgrading the infrastructure of the 77 member states, Marzouk said. Egypt will be a focal point because of its location, industrial cities, 100 million population, purchasing power of $370 billion, well trained labor, free trade agreements covering 1.3 billion people, and the cost of production that is 30 percent cheaper, Marzouk added.
“There is a pan-African road that is being constructed extending from northern Egypt to Cape town. We finalized our part until Ethiopia. You can take a car from Suez Canal and drive straight to Addis Ababa. The rest will be finished through the help of Chinese companies, Chinese know-how, and investments,” Marzouk stated.
Chairman of the Egyptian-Chinese Business Council Abdel Sattar al-Eshra told CGTN in a TV interview on Friday that Chinese products will pass through the Canal fast after its enlargement.
There are more than 192 global companies operating in the Suez Canal axis. Chinese investments in Egypt rose by 55 percent since the launching of BRI in 2013. The Chinese president has pledged $40 billion of additional investments as part of the initiative, Political Science Professor at Beni Suef University Nadia Helmy told CGTN. China took part in the funding of energy projects in Aswan, railways, infrastructure, and two industrial zones, Helmy said.
Chinese exports to Egypt hit $11 billion in 2018 against imports worth just $1.8 billion. Chinese investments in Egypt reached $15 billion, according to Secretary General of the Union of Arab Banks Wessam Fattoh.
The second edition of BRFIC is taking place on April 25 - 27, and attended by 37 heads of state, the United Nations secretary-general and the managing director of the International Monetary Fund (IMF). That is in addition to 5,000 from more than 150 countries, and 90 international organizations, according to CGTN.
The initiative was launched in 2013. Since then, BRI agreements were signed by 126 countries and 29 international organizations with China.
CAIRO - 16 January 2019: Exim Bank of China will provide Egypt with a soft loan worth $1.2 billion to finance all costs of the construction of the electric train connecting Salam City and the New Administrative Capital.