Chinese investments continue to play a pivotal role in bolstering Egypt's economic growth amid the withdrawal of Western investors from key sectors, particularly in technology and infrastructure. Experts believe this relationship is set to deepen, paving the way for enhanced technology cooperation and mutual economic benefit.
According to Diaa Helmy, the secretary-general of the Egyptian-Chinese Chamber of Commerce, recent collaboration agreements with China signal not only increased investments but also the approval for transferring advanced technologies to Egypt. He stated, "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."
Helmy emphasized the importance of Chinese investments saying, "While some Western countries have shied away from investing in certain Egyptian tech sectors, China has become a lifeline for the country." With Chinese backing, Egypt is actively working to localize technologies across various industries, such as electric car production, satellite development, and advanced communication technologies like 5G.
A notable example of this investment surge is the new car manufacturing plant established by Chinese automaker Geely outside Cairo. This factory, the first of its kind within the Middle East and Africa, commenced production earlier this year and is expected to churn out approximately 30,000 vehicles annually within the coming years.
Chinese financial backing is not limited to automotive ventures. For example, Egypt's Suez Wind Energy recently inked a deal with Power Construction Corporation of China for the construction of an impressive 1,100-megawatt wind farm located at the Gulf of Suez. Once operational, it will stand as one of Africa's largest wind projects, showcasing China's commitment to renewable energy development.
Ali El-Hefny, Egypt's former ambassador to China, noted, "China has become one of the largest investors in Egypt." This growing investment is largely attributable to the strategic partnership cultivated since Egypt joined China's Belt and Road Initiative back in 2013. Central to this dynamic partnership is the China-Egypt TEDA Suez Economic and Trade Cooperation Zone, located near the strategic Suez Canal. "This ambitious project aims to replicate the success of Tianjin, which is a major industrial hub in China," El-Hefny remarked.
Ahmed Radwan, the CEO of Egypt-TEDA Investment Company, explained the current status of the TEDA zone, which houses around 170 companies and aims to reach 200 by the end of 2025. The ambitious nature of these projects speaks volumes about the accelerated Chinese investment trend. Industries such as renewable energy, steel production, textiles, and mobile technologies are all expected to flourish with Chinese backing.
By June 2024, investments from China within the TEDA zone are projected to exceed $3 billion, representing significant growth. Indeed, the Egyptian Chamber of Commerce notes remarkable results from the previous year, with Chinese investments surging by $443 million during the first half of the 2023-24 fiscal year. The General Authority for Investment and Free Zones also revealed substantial activity, asserting over 2,000 Chinese companies currently operate within Egypt, with ventures worth $8 billion total.
Highlighting the collaborative future, Helmy mentioned, "For China, this collaboration guarantees promising opportunities not just within Egypt, but across Africa. The Egyptian market presents significant potential for those willing to invest."
Meanwhile, the German market also remains highly engaged with China. Despite global uncertainties, German companies show confidence in China's market potential, as evidenced this past month when Bayer launched its new factory located in Hangzhou, with significant investments aligning with China's capabilities on agricultural products.
Ma Jishen, director of Bayer Crop Science Hangzhou Production Site, described the recent launch, stating, "The [Bayer] site is projected to generate output worth 2 billion yuan this year." The facility will support sustainable farming methods by producing insecticides, seed treatments, and growth regulators for key agricultural products.
Notably, as Bayer aims for innovation and sustainability, the local authorities played a major role, providing responsive service and tailoring investment expectations to meet corporate needs. Ma confirmed, "The local authorities spent nearly a year tailoring an investment agreement for Bayer. It sends a clear message indicating China welcomes companies to operate and grow their businesses here."
Recent expansions are not just limited to Bayer. German companies like ZEISS Group and Bartec Thermal Control have also announced plans to increase their operational footprint within China, establishing headquarters and facilities with significant investment commitments.
According to the latest statistics from 2024, new foreign investments saw a decline of only 9.9%, with over 59,000 new enterprises formed and total foreign investment reaching over 20.6 trillion yuan. Germany’s consistent support signals brighter prospects for collaboration between the two nations.
Meanwhile, China's proactive stance on opening market sectors such as telecommunications and biomedicine continues to attract attention from foreign stakeholders. A recent State Council meeting emphasized the importance of foreign investment on employment stability and emphasized strategies to create sustainable investment environments moving forward.
Ma summed up the sentiment within the German business community by stating, "We're optimistic about China's economic resilience, technological progress, and its focus on low-carbon and rural development. Our investment not only creates opportunities for us to develop here but also contributes to the world."