Al-Ahram Weekly | Economy

		Al-Ahram Weekly On-line 14 - 20 December 2000 Issue No.512
Published in Cairo by AL-AHRAM established in 1875		Current issue \| Previous issue \| Site map

Go East

By Aziza Sami
The economic power to watch in our new century, as all indicators show, is China. And perhaps Egypt could do worse than devote a little more attention to establishing ties with this emergent giant, at least as much attention as it devotes to more traditional trading partners.
For fifty years Europe and America have been at the hub of our economic ties and the coveted purveyors of trade and assistance, a relatively short lull in the socialist sixties notwithstanding. Yet the problems trade negotiations with these two have encountered cannot be denied.
One does not want to be too pessimistic of their true prospects. Yet it is apparent to all that, while partnership negotiations with EU will evolve, they will evolve, whatever the good intentions, in a manner that underlines the current balance in favour of Europe. And, in a world where politics and economics have never been so intertwined it remains to be seen what the dividends will be of opening up economically to a partner characterised by reticence over involvement through mediation in the Middle East's ongoing conflict.
Economic ties with the US, meanwhile, remain what they have been for 25 years, an instrument of politics. And nothing could make this clearer than USAID's manner of dispensing its so-called aid.
If the US and the EU are the superpowers of today this does not mean that we cannot turn our attention to tomorrow. And that means focusing more and more on China.
China has for long taken an active interest in the Middle East, aware of the geopolitical potential the region will hold for it in future. And, with some 1.3 billion potential consumers, China is one of the world's largest markets. An economy that is still liberalising, and still unsaturated, it is likely, if negotiations are pursued assiduously enough, to be able to accommodate no small portion of Egypt's exports while at the same time opening a gateway to Asia.
There are important lessons to be learned from China not least how, through investment incentives, substantial foreign direct investment can be attracted while simultaneously retaining political and social distinctiveness. In addition China furnishes an object lesson in how government and private initiative together can foster low cost, highly competitive industries, beating other markets at their own game. For years, now, the US has faced a trade deficit in favour of China, coveting its entry in to the "free world" even as it negotiates with Beijing with the aim of hemming in its mighty power.
In Egypt, Chinese goods have inundated the market, from advanced electronic equipment to Ramadan lanterns and oriental garments, threatening to displace our own traditional crafts.
There is a growing realisation in Egypt of the importance of China. The Chinese were among the first partners to invest in the mega project of the Gulf of Suez, and are looking to Egypt to support the Chinese position in the upcoming round of WTO negotiations. The ministry of economy is currently hard at work ironing out the snags that have restricted entry of citrus exports to the Chinese market, while recent political initiatives on both sides clearly indicate a desire for much closer involvement.
So what has the local business community done in the way of follow through?
There has been no specific endeavour to solicit joint ventures or direct exports to China, a fact made obvious by the reports submitted by Egyptian trade representative offices. Nor has there been any initiative to invite Chinese associations to come and teach our businessmen the art of competition.
At a time when the world, led by the US and its multinationals, is straining to gain a foothold in China, we must escalate our own efforts to compete with countries such as Israel and Spain that are aggressively marketing themselves to the Asian giant. In the race to capture one of the most substantial of world markets, we must be clear where we stand.

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