China-Egypt trade and investment ties – seeking a better balance

This policy brief examines Chinese investments in Egypt and the bi-lateral trading relationship between the two countries in order to better understand the extent of economic engagement. Since 2013, a spur in high-level diplomatic exchanges led to the signing of numerous agreements, including a Comprehensive Strategic Partnership agreement. Promises of Chinese foreign direct investment (FDI) into large-scale transport and energy infrastructure projects have been cited. With the trade balance heavily tipped in favour of China, this policy brief identifies ways for Egypt to more broadly benefit from the relationship.

Recommendations:

• Chinese companies in joint ventures with Egyptian companies should provide a good balance of employment opportunities for Egypt’s trained and educated workforce, rather than merely employing unskilled Egyptian labourers. Such a balance would include access to mid-managerial positions and training in new technical areas

• China should ensure that it maintains its investment commitments to Egypt particularly in the fields of rail transport and electricity supply in order for Egypt to benefit from the relationship. For its part, Egypt should seek to improve the business environment by taking into consideration the interests of local communities in order to avoid opposition and potential legal disputes surrounding the profit-making interests of Chinese businesses as foreign investors

• China and Egypt should agree at the political level to take determined action to correct the trade imbalance. Such action can include China committing to help Egypt to move up the value added product chain through joint production of goods of interest to the Chinese market