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Al-Ahram Weekly 1 - 7 April 1999 Issue No. 423 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 1 - 7 April 1999 Issue No. 423
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Interview Profile Features Travel Living Sports People Time Out Chronicles Cartoons Letters Oriental horizons
ByGamal Nkrumah and Nevine Khalil
The cabinet today will review the subjects that are expected to come up for discussion during President Hosni Mubarak's three-state tour of Asia. The president, accompanied by Mrs Mubarak and a large delegation of officials and businessmen, will begin next Monday a nine-day tour of China, South Korea and Japan. Promoting investment and trade relations, as well as technological cooperation, will top Mubarak's agenda in the three Asian countries.
Talks during the visit will focus primarily on ways of redressing the trade imbalance between Egypt and the Asian states. A number of bilateral agreements covering cooperation in the textile, pharmaceutical and automobile industries, as well as cooperation in the energy and technical education sectors, are expected to be signed during the trip. The high-powered Egyptian delegation of top policy-makers and businessmen will become more acquainted with East-Asian government and business leaders. Mubarak's visit comes at a time when the three Asian countries are working hard at improving foreign access to their huge markets.
The economies of China, Korea and Japan are resilient and dynamic despite serious setbacks caused by the Asian financial crisis and sweeping changes, including unprecedented liberalisation. The tour is regarded as a golden opportunity to chart the parameters of economic and trade relations, sign bilateral agreements and close deals. Beijing, for example, is opening up its vast telecommunications market to foreign investors and is welcoming direct foreign investment in Chinese Internet and data companies. China has the world's fastest growing telecommunications market and the opportunities are unlimited.
Naturally, politics are expected to be overshadowed by economics during the tour, even though support for the Arab cause will be sought. There will also be discussions of regional security in Northeast Asia, Northeast Africa and the Middle East in Beijing, Seoul and Tokyo.
Mubarak's first stop in Beijing comes a few days before an important visit by Chinese Premier Zhu Rongji to the United States, in which discussions will focus on China's long-stalled accession to the World Trade Organisation (WTO). Egypt and China are expected to cooperate in order to form a united front at the WTO to secure the interests of developing countries.
Mubarak's five-day visit to China is a timely tribute to Beijing's growing economy, one of the fastest growing in the world. Unlike many of its Asian neighbours, China is far from being in recession. With an economic growth rate of eight per cent and an export growth rate of 25 per cent per annum, China is destined to become a world economic giant in the next century. The trade volume between Egypt and China amounted to more than $520 million in 1997 -- an estimated $60 million of which were Egyptian exports.
After Beijing, Mubarak will visit Shanghai, China's economic capital, where he will receive a prize from Shanghai University. Mubarak is also expected to visit another key industrial city, Shenzen, a boomtown bordering Hong Kong, to witness the breathtaking pace of China's economic development first hand.
Mubarak's second stop in South Korea has special significance, since it is the first time that an Egyptian president visits Seoul in an official capacity. The visit is regarded as a turning point in Egyptian-South Korean relations because the two countries only warmed up to each other during the past decade following the establishment of diplomatic relations. Traditionally, Egypt had closer political and military ties with North Korea. The Cairo-Seoul trade volume continues to rise annually, reaching $376 million in the first 10 months of 1998, $138 million of which were Egyptian exports.
Mubarak's visit to Japan comes at a time of recession and great economic upheaval in the country, and yet Japanese suppliers and contractors continue to do handsome trade with Egypt. The steady depreciation of the yen has boosted sales of vehicles and electronics, which are the most important Japanese exports to Egypt.
The Egyptian private sector would have liked to launch additional joint ventures involving technology transfer from Japan, but Japanese entrepreneurs have focused on investing in infrastructure development, petrochemicals and cement projects. Japanese auto-makers, however, are determined to step up business in Egypt -- which accounts for a small slice of Japanese car sales to the Middle East. The Gulf oil-producing countries remain by far the biggest importers of Japanese vehicles.
Nonetheless, Japan is looking to countries such as Egypt, Turkey and Iran with potentially large domestic markets and relatively cheap labour to establish assembly plants. Although neither Nissan nor Toyota -- Japan's leading auto-makers -- have immediate plans to increase regional production substantially, Nissan last year began vehicle assembly at a new plant in Cairo. The plant has an assembly capacity of around 20,000 vehicles per year.
