Friday,19 October, 2018
Current issue | Issue 1408, (6 - 12 September 2018)
Friday,19 October, 2018
Issue 1408, (6 - 12 September 2018)

Ahram Weekly

Expanding partnership

President Abdel-Fattah Al-Sisi’s visit to China adds a new dimension to Egyptian-Sino relations, reported by Reem LeilaDina Ezzat and Safeya Mounir

 

Al-Sisi in Beijing to participate in the Forum on China-Africa Cooperation Summit (FOCAC)
Al-Sisi in Beijing to participate in the Forum on China-Africa Cooperation Summit (FOCAC)
Al-Ahram Weekly

President Abdel-Fattah Al-Sisi headed to Beijing earlier this week to participate in the Forum on China-Africa Cooperation Summit (FOCAC). He also held bilateral talks with his Chinese counterpart Xi Jinping as well as expanded meetings during which the Egyptian delegation met with Chinese officials.

Al-Sisi and the accompanying Egyptian business delegation signed agreements that will increase Chinese investments in Egypt by $18.3 billion. The agreements covered three projects in the Chinese Industrial City in Ain Sokhna, the initiating of phase two of the Central Business District in Egypt’s New Administrative Capital, the pumped storage project at Ataqa and a power station using clean coal technology and generating six gigawatts of electricity at Hamrawein on the Red Sea. An agreement for establishing an electric train linking the New Administrative Capital in Egypt and 10 Ramadan city was also finalised. The project will be financed through a loan from China to be paid back over 20 years.

During the talks President Xi confirmed Beijing’s continuing support for Egypt. He underlined the need to increase trade between Egypt and China, noting that Egypt is one of the guests of honour at the China International ImportExpo (CIIE) scheduled to be held in Shanghai in November. President Xi said the CIIE will offer opportunities to promote Egyptian products and to narrow the countries’ trade imbalance.

China-Egypt trade reached $11 billion in 2017. The balance is tipped in China’s favour with Egypt importing $9 billion of Chinese goods and exporting just $2 billion of local products.

Al-Sisi underlined the need to adopt more measures to encourage Egyptian exports to China and facilitate their access to Chinese markets.

Cairo’s support for Beijing’s Belt and Road Initiative (BRI) was highlighted. BRI, an ambitious trade and development plan that seeks to connect most of Asia, a good part of Africa and the entire Mediterranean basin, was launched in 2013.

Al-Sisi stressed the role Egypt can play in the initiative given its location at the crossroads of Asia, Europe and Africa and the importance of the Suez Canal as a shipping route.

“When Egypt thinks of its relations with China it will certainly be eying potential benefits from BRI which will extensively use the Suez Canal, and have spinoffs for Egypt in terms of its trade relations with Africa, especially East Africa with which Egypt has major strategic interests and a sub-regional preferential trade agreement,” Asian affairs expert Mohamed Fayez told Al-Ahram Weekly.

“Intercontinental trade between Egypt and other countries of Africa has always been hampered by the absence of efficient commercial transportation. Now China is building the infrastructure. Egypt and China have excellent relations. Egypt just needs to consolidate its African presence to make the most of an opportunity that is up for grabs,” Fayez added.

“Though BRI is designed to serve the interests of China, other countries will inevitably benefit. To what extent depends on how hard they work at it.”

Tourism is another sector with great potential. The number of Chinese tourists visiting Egypt witnessed a noticeable increase this year. Egypt tops the list of Chinese tourists’ most favoured African destinations, says Abul-Maati Shaarawi, the Tourism Promotion Authority’s representative in China. In 2017, 300,000 Chinese tourists visited Egypt compared to 180,000 in 2016 and 115,000 in 2015.

The number of flights between Egypt and China is expected to increase. EgyptAir, Egypt’s national carrier, is scheduled to start operating a new direct flight line between Cairo and Hong Kong later this month, and two scheduled flights per week will link Cairo to Chengdu.

Sameh Saad, a former marketing adviser to the minister of tourism, says the Chinese market is promising and has huge growth potentials given Egypt’s current low market share. He warned, however, that fierce competition between companies seeking to open the Chinese market has cut profit margins to the bone.

“Many companies have entered the market recently and are offering low prices to attract customers but this comes at the expense of quality and service,” he said.  

Operators need to be careful that they do not propagate an image of Egypt as a low cost, budget destination that provides little in premium services since this would put-off Chinese tourists who are known for their high level of spending on holidays.

Al-Sisi said he hoped Beijing would encourage private sector companies to open more businesses in Egypt to take advantage of Egypt’s free trade agreements with African countries.

President Al-Sisi attended the 2018 summit of FOCAC alongside 27 other heads of state and leaders of international organisations. FOCAC, a triennial meeting, aims to enhance cooperation between China and Africa to bring tangible benefits to the Chinese and African peoples.

In his address to the summit Al-Sisi stressed Cairo’s belief in the importance of complementarities between development initiatives, especially the BRI and the Africa Development and Modernisation Agenda.

“Within this framework Egypt offers the economic zone of the Suez Canal to the world as a logistic and economic centre that can contribute to the development of international traffic,” said Al-Sisi.

Political analyst Hassan Nafaa says China’s interest in the Suez Canal area is driven by commercial rather than imperial ambitions.

“China wants to market its products in countries of the developing world and to import from them the raw materials it needs.”

Nafaa believes Cairo’s longstanding relationship with Beijing — Egypt was the first African country to acknowledge the Republic of China and establish diplomatic relations with it — place it in a good position to benefit from China’s growing investments.”

FOCAC also offered Al-Sisi an opportunity to touch base with African leaders. When he met with Ethiopian Prime Minister Abiy Ahmed both leaders expressed their determination to reach an agreement over the Grand Ethiopian Renaissance Dam that guarantees Egypt’s quota of Nile water and ensures Ethiopia can pursue its own development agenda. With Sudanese President Omar Al-Bashir, Al-Sisi discussed preparations for the convening of the Egyptian-Sudanese Higher Committee which both men will attend.

Al-Sisi also met President Salva Kiir of South Sudan and Somali President Mohamed Abdullahi Mohamed.

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