As Egypt and China have decided to elevate their bilateral ties to a comprehensive strategic partnership, Egyptian economists see the move is likely to amplify investment opportunities and mutual trade between the two countries.
Egyptian President Abdel Fattah al-Sisi, who is currently on a four-day official visit to Beijing, signed on Tuesday a joint statement with his Chinese counterpart Xi Jinping to boost political, economic, military, cultural and technological cooperation along with that on regional and international affairs.
“Egypt provides great investment opportunities to China and it can be a portal for Chinese products into African markets due to the Egyptian strategic geographic location,” Amr Saleh, professor of political economy at Cairo-based Ain Shams University and former World Bank project officer, told Xinhua.
The professor said that relations between Egypt and China should not be restricted to mutual trade “but it is very important to be elevated to the level of comprehensive strategic partnership between the two countries,” stressing that both Egyptian and Chinese leaders have the political will for the move.
The Egyptian government led by Prime Minister Ibrahim Mahlab has recently established a special cabinet unit to study fields of cooperation with China, which shows the interest of the Egyptian leadership to boost partnership with the giant Asian country.
“Egypt needs a strategic partner not just a business partner, while China has a desire to create strategic economic alternatives in light of the slowing worldwide economy,” the professor added.
Saleh expects future military cooperation between Egypt and China as a key field of economic partnership between the two strategic partners.
“Cooperation in arms industries, which is worth billions of dollars, represents a good chance for both Egypt and China as it appears to be military while it is economic in the first place,” the professor told Xinhua, noting the industry is one of the main sources of national income for big countries.
Egypt’s economy has been ailing over the past four years due to political turmoil that resulted from the ouster of two heads of state. Sisi’s administration is currently struggling to put economy back on track.
Last August, Sisi gave the go-ahead signal for digging a 72-km expansion of the original Suez Canal as a national project to boost the country’s economy, ordering “the New Suez Canal” to be open for ship navigation in August 2015.
The Egyptian president said that the Chinese companies have great opportunities to invest in the Suez Canal Corridor projects, reassuring to facilitate procedures and provide an ideal atmosphere for foreign investors in Egypt.
“Chinese companies have vast opportunities to work in logistic projects related to the Suez Canal Corridor after the new waterway is completed, such as platform building, container making, ship maintenance and repair, fuel provision, etc,” said Hamdy Abdel-Azim, economics professor at Cairo-based Sadat Academy and member of Economy and Legislation Association.
He echoed Saleh’s view that there could also be future military cooperation between Egypt and China in weapon spare parts and development.
A few days before leaving Cairo, Sisi told Chinese official media including Xinhua that Egypt supports Xi’s initiative on building the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Sisi said Egypt can be a key player in implementing this initiative due to its strategic location as portal for Africa and the Arab world.
“The Silk Road used to be a well-known historical trade route and if revived it will increase the trade volume passing through it,” the economic expert said, adding that Egypt needs to develop its basic infrastructure and services to attract foreign investors in general and Chinese ones in particular.
Abdel-Azim told Xinhua that the intended Silk Road symbolizes a key of future common trade between Egypt and China and a communication bridge between Asian and African countries.
Sisi has recently said that Egypt is establishing a huge road network of 3,400 km within one year as part of its efforts to facilitate investment environment to reassure foreign investors.
Trade volume between Egypt and China exceeded 10 billion U.S. dollars for the first time in 2013, more than 80 percent of which is represented in Chinese exports.
“Egypt needs to develop technologies and improve its products to be qualified for export and make up for the gap between its imports and exports,” the economist said.
He also expected the Chinese investments in Egypt, with maximum 10 percent foreign labors according to the regulations, to help reduce unemployment in the North African country.
Political turmoil over the past few years caused a sharp decline in the tourism industry in Egypt, which brought the country over 13 billion U.S. dollars in 2010 alone.
On Tuesday in Beijing, after signing a joint statement with Xi, Sisi hoped that more Chinese tourists will visit Egypt as more Egyptian students study in China.