China’s economic influence on Egypt grows

Significance

The deal underscores the strength of bilateral relations. China is vital to Egypt's infrastructure-led development model, particularly around the Suez Canal zone. Beijing has become Cairo's single-largest non-Arab creditor and Chinese firms show increasing interest in Egypt as a manufacturing centre with preferential access to European and African markets.

Impacts

• Egypt’s reliance on external financing risks an unsustainable debt build-up.
• Military-affiliated firms will continue to benefit from privileged access to megaproject development, crowding out the private sector.
• Cairo will look to assuage Western allies over China’s investment footprint by signing economic agreements as a way of building alliances.
• Egypt will seek technology transfers from Chinese investors as it looks to move up the manufacturing value chain.