Egypt and China – a win-win situation?

German scholar Thomas Demmelhuber recently presented an interesting paper on Egyptian-Chinese economic relationships at the German Orientalists Day in Freiburg, Germany.

These are the main points:

The rise of Egyptian-Chinese economic relations needs to be seen in the context of the Nazif cabinet which took office in 2004 and tries to orientate the Egyptian economy towards foreign trade. But it is also a political manoever, a message to the established partners EU/US.

However, the reality does not live up to the bullish statements made by economy minister Rashid and others on the potential of Egyptian-Chinese trade. Up until early 2006, China was only the 29th largest foreign investor in Egypt.

Now a few committees and investment zones were created, and Chinese investment as well as mutual trade is likely to grow.

Personnally, I don’t see a lot of trade potential for Egyptian companies here, other than production joint-ventures in Egypt, which could serve Chinese companies well to re-export to Europe and Africa, while creating desperately needed jobs for Egyptians.

Other then that, Egypt will remain a market for cheap Chinese products (I guess nowadays few products under LE20 are sold in Misr which are not ‘Made in China’) which is smuggled into the country via the Gulf (much of Dubai’s rise is down to smuggling).

I heard from European diplomats that most of current Egyptian-Chinese trade takes place outside statistics, and I’d love to know how much Chinese companies are truly selling in Egypt (and elsewhere in the Middle East).

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