By Al-Fassel | 2024-01-05

China has been attempting to gain greater access to Africa for years, and has sought to do so through Egypt via the marked expansion of economic, trade, military and cultural ties.

Since Chinese President Xi Jinping's ascension to power and his launch of the Belt and Road Initiative (BRI) in 2013, Egypt has been on the receiving end of an increasing amount of Chinese investment.

Egypt occupies a strategic position within the BRI as China sees the North African country as key to expanding access for its goods into European and African markets.

"China is the biggest user of the Suez Canal and the largest investor in the Suez Canal Economic Zone -- a crucial link for 60% of the goods it ships to Europe," the Middle East Institute (MEI) said in February.

"China's implementation of commercial projects in Egypt reflects a growing interest in increasing its presence and activities in and around the Red Sea corridor and southern Mediterranean," it said.

The two countries signed a "comprehensive strategic partnership" agreement in December 2014, shortly after Egyptian President Abdel Fattah al-Sisi took office.

Since then, the two countries have signed a substantial number of agreements.

"From 2017 to 2022, Chinese investment in Egypt increased by 317%," according to a Washington Institute analysis published in April.

"Data from the Central Bank of Egypt revealed that China acquired the largest share of Egypt's imports, at a rate of 10.1%, at an amount of about $2 billion, during the ending fiscal year," the report said.

China also ranked as the second largest trading partner of Egypt after the United Arab Emirates (UAE), it added.

Concerns about 'debt trap diplomacy'

But at the same time, China has emerged as Egypt's fourth largest creditor, with outstanding debts amounting to almost $8 billion, the MEI report said.

This trend is a source of increasing concern for observers who point to China's practice of "debt trap diplomacy," which benefits mainly Beijing at the expense of the local economies it claims to support.

The BRI serves as a cover for China's debt trap and expanding military presence, the South-South Research Initiative, based in Colombo, Sri Lanka, said in a January 26 report.

The BRI has been plagued by "sustainability questions, accusations of corruption and the perception of BRI as a front for Chinese hegemony," according to a January 2022 report by the Arab Center Washington DC.

Several countries have experienced a form of "buyer's remorse" due to their embrace of the BRI and the assumption of accompanying debt burdens, it said.

"Many believe Beijing is setting this 'debt trap' on purpose to take control of strategic assets," it added.

"Beijing's speed and determination [in pursuing the BRI] has been most evident in the Middle East," the report said, noting that China "has pumped at least $123 billion into the Middle East in BRI-related project financing."

"While China's Middle East engagement strategy may be touted as benign, in fact it has gone hand in hand with the expansion of China's military and diplomatic profile in the Middle East," it said.

Eye on Egypt

Of particular concern are China's massive investments in the Suez Canal Economic Zone, which analysts say go far beyond economic development and are reflective of Beijing's plans to dominate various parts of the Mediterranean and Africa.

The BRI includes plans to develop a "maritime Silk Road" that connects China to the Mediterranean via the South China Sea, Indian Ocean and Suez Canal.

Ostensibly commercial in nature, the ports potentially have military value, too, allowing China's rapidly growing navy to expand its reach.

"Egypt represents a major concentration of Chinese port and storage financing, construction, and investment," said a May 2021 report by MEI.

China Ocean Shipping Company Ltd. (COSCO) "has a 20% stake in the Suez Canal Container Company located on the Mediterranean end of the Suez Canal," it said.

Hutchison Ports, a Hong Kong-based multinational conglomerate, operates Egypt's two main commercial ports at Alexandria and al-Dekheila, it added.

China has also been heavily involved in the construction of Egypt's New Administrative Capital, on the outskirts of Cairo, where the China State Construction Engineering Corporation (CSCEC) is building the Central Business District.

Chinese banks are financing roughly 85% of the $3 billion project, which includes 20 towers, one of which will be the tallest building in Africa when construction is completed, according to Al-Jazeera.