Egyptian-Chinese Partnership in Light of “Arab-Chinese” Relations ’s future

Sino-Arab relations go back more than two thousand years, as the Silk Roads contributed to increasing communication and linkage between them by land and sea, and there has always been a state of maintaining the sustainability of exchanges, cooperation, openness, and mutual benefit. Arab countries have always seen China as a highly stable economic model, especially after the global financial crisis, compared to the American and European models.

In contrast,  China believes that many Arab countries can follow its path economically, through further reforms, the removal of trade barriers, and the promotion of new ways to develop production and industry so that it can move and catch up with the Chinese economic path.

It should be noted that there are strong diplomatic and economic relations that linked China with the Arab countries, and Egypt was one of the first countries to recognize China and its republic in 1956, and then followed in the creation of Chinese relations after that all Arab countries by 1990, and China has contributed since then to the improvement of infrastructure The Arab countries have roads and railways and the establishment of various facilities.

Arab-Chinese relations developed by 2004 in light of the signing of the Arab-Chinese Forum document, and the framework agreement for economic, trade, investment and technical cooperation between China and the Gulf Cooperation Council countries in particular, which then paved the way for the establishment of a free trade zone between both sides.

In view of the relative importance of Arab-Chinese-Chinese-Egyptian relations, which have evolved steadily over the past few decades, this report highlights the reality of inter-economic relations and to explain the motives for increasing the Chinese presence in the region, especially as the world is witnessing a state of sharp polarization at the current exceptional time, through The following axes:

First: Features of Sino-Arab relations

Second: Arab-Chinese economic relations, with a focus on Egypt

A – Sino-Arab economic relations

b- Sino-Egyptian economic relations

Third: the volume of Chinese investments in Arab countries and Egypt

First: Features of Sino-Arab relations

The rapid development in the inter-relationship came after the signing of a document to establish a comprehensive strategic cooperation between both sides based on common development in 2010 and signature number of Arab countries many cultural and educational agreements with China in 2015.these agreements helped to create and exist Mutual trust has facilitated the accession of more Arab countries and their support for a large number of Chinese initiatives, both at the regional and international levels, such as the Belt and Road Initiative, the Global Development and Security Initiative, the Global Mediation Initiative, the Conference on Interaction and Confidence-Building Measures in Asia and the Shanghai Cooperation Organization (SCO).

Beijing has great economic and strategic interests in the Arab world, and recently the Chinese-Arab relations witnessed a great development on several levels, as a number of memorandums were signed to enhance security and investments in the region. The Arab countries are also considered a major supporter of the Chinese Belt and Road Initiative, which witnessed the accession of 20 Arab countries, and China continues to attract countries to the initiative for the great benefit that will accrue to it and to the Silk Road countries. China is keen to cooperate with Arab countries according to the principle of mutual benefit and the pursuit of mutual and common gain.

China’s targeted cooperation in the Arab States has been concentrated mainly in the areas of energy, infrastructure, investment, trade, and nuclear and new energy. China’s policy of neutrality and its agenda free from political interference in the internal affairs of countries and its opposition to foreign interference contributed to the expansion that supports the internal development processes of many Arab countries, and to achieving security and stability in the Middle East in light of its endeavors to solve existing problems and propose many initiatives.

Chinese-Egyptian relations

Egypt is the first Arab country to establish diplomatic relations with China since 1956. and since then, there has been a state of mutual cooperation between the two parties and the provision of aid , as Egypt has supported China in the United Nations and in a number of Many of its core principles and initiatives, on the other hand, China supported Egypt in all the challenges and obstacles it faced, starting from the decision to nationalize the Suez Canal and the entry of the tripartite aggression to support in its defense against terrorism and confronting foreign interference in its internal affairs, and both countries agree to adopt the point of support for the issues of the Arab countries that Going through crises and conflicts such as Palestine, Syria and Libya, and the existence of an umbrella of international cooperation and benefiting from globalization.

The 1990s was one of the most important periods that witnessed an important development in terms of relations between the two parties at all economic, political, cultural and strategic levels. In 1999, a strategic cooperation agreement was signed between the two countries, and tourism, movement and visits increased, followed by the signing of more important agreements that strengthened China’s economic role in the Arab region and the African continent as a whole.

Second: Arab-Chinese economic relations, with a focus on Egypt

1-Arab-Chinese economic relations

China considers the Arab countries as a large and important market for the promotion of its products, and the achievement of large profits, particularly in the construction contracts implemented by Chinese companies. It is expanding its presence in the Arab countries in important sectors such as infrastructure, technology, communications, industry, transport and energy, as well as its attempts to conclude partnerships in new areas such as modern technologies, artificial intelligence and the exchange of encrypted currencies, and it is always seeking to adopt new patterns that help facilitate financing operations and enhance inter-trade between The two parties Such as the establishment of the China-Arab Center for Reform and Development Studies in 2020.

China’s targeting of the Arab countries is focused on important sectors such as the energy sector, where the Arab countries supply China with nearly 50% of its oil needs, as China is one of the largest oil importers in the world, as China’s oil consumption increased from 2.9 million barrels per day in 1993 To 14 million barrels per day in 2020, according to the Chinese customs administration, and its oil imports from Arab countries jumped nearly sevenfold, from about 0.8 million barrels per day in 2003 to 5.1 million barrels in 2020. Table (1) shows the largest regions from which China imports oil.

Source: China Customs Administration data on China’s oil imports for the year 2020

It should be noted here that China’s increasing demand for oil from the Arab countries, as it relies on it mainly in its domestic production, in light of the decline in foreign demand, especially the American one, as the US dependence on oil from the Middle East region decreased during the past decade, which contributed to the consolidation of relations. Between the Arab and Chinese sides more.

China’s oil imports from Arab countries amounted to about 264 million tons in 2021, according to data from the Chinese Customs Administration. Among the largest Arab countries that export oil to China are Saudi Arabia, Iraq, Oman, the Emirates and Kuwait. Saudi Arabia is the largest source of oil imports from China, as Saudi Arabia alone contributed to the oil exported to China from the world, 17.4% in 2021.Trade exchange between China and the Arab countries has witnessed a steady increase in most years since 1954, as Figure (1) shows the volume of trade exchange between China and the Arab countries for selected years from 1954 to 2021, as it increased from $12.2 million in 1954 to reach $330 billion in 2021. 2021, an increase of 37% over 2020.

Figure (1): The volume of trade exchange between China and the Arab countries (1954-2021) in billions of dollars

According to World Trade Center data, the largest Arab trading partners for the State of China for the year 2020 were as follows: Saudi Arabia, with a volume of trade exchange between the two countries amounting to about $67.1 billion, followed by the UAE with a volume of trade exchange amounting to $49.2 billion, then Iraq with a volume of trade exchange amounting to $30.2 billion. And Oman, with a volume of trade exchange amounting to 18.6 billion dollars, and finally Egypt, with a volume of trade exchange amounting to 14.5 billion dollars.

The Covid 19 period witnessed multiple attempts to enhance Chinese-Arab support and cooperation in the field of health, as many Arab countries especially the Gulf Cooperation Council countries and Egypt, provided strong support to China during that period by supplying protective clothing and masks, and in return China supported the Arab by providing vaccines  more than 72 million doses of vaccines to 17 country and the League of Arab States, until August 2021.

The Arab-Chinese summit, which was held recently in the Saudi capital, Riyadh, confirmed the existence of a new stage of development in strategic relations and partnerships between both sides, and Saudi Arabia and Egypt play a major role in this regard, according to their vision for development 2030.

The main reasons and motives for the economic relations between the Arab countries and China are as follows:

1- The Arab countries provide China with a large market for marketing its products, and it is an important source of oil imports, on which China relies heavily as it is one of the largest oil importers in the world.

2- China is the largest country in terms of population, the largest economy in the world in terms of purchasing power, and the second largest economy in the world after the United States of America in terms of market value, and it is expected to become the largest economy in the world by 2030.

3- For China, the Arab countries represent an important place for trade, investment and construction, and a destination for developing work in the fields of energy and infrastructure.

4- China sees the Arab countries as a basis for continuing and strengthening the Belt and Road Initiative, which will benefit both it and the Silk Countries, as about 20 Arab countries have joined the initiative.

5- On the other hand, the Arab countries see China as one of the most important and largest importers of oil in the world, as it imports more than 50% of the oil from the Arab countries.

6- China is considered a partner in the economic diversification program that the Arab countries are trying to adopt with the aim of reducing dependence on exporting energy and primary resources and becoming an important economic center between Asia, Africa and Europe.

B- Sino-Egyptian economic relations:Egypt and China enjoy important economic relations dating back more than 6 decades, since the establishment of official diplomatic relations between the two countries in 1956, as economic and trade relations between the two sides are an engine for joint cooperation. Those years witnessed the signing of a number of agreements to develop the trade and economic agreement between them, as a commercial office was established in each country in 1955 to enhance trade exchange between them, and an agreement was signed between China and Egypt in 1964 for economic and technical cooperation and the existence of a specific trade protocol.

As a result, trade flows between China and Egypt increased. The two countries were keen to sign agreements to exchange expertise in the fields of medicine, agriculture, equipment and traditional industries. In 1997, a number of agreements were signed to establish investments in the Suez Canal, and to promote technical and commercial cooperation and cooperation in the fields of electricity and energy and the development of family and rural areas.

The volume of trade exchange between the two countries has witnessed a significant increase over the past years, especially in recent years, as shown in Figure (2), as the volume of trade exchange increased from $11 million in 1953 to reach $20 billion in 2021, an increase of 37.35% from 2020, to become China, for more than 8 years, is Egypt’s largest and most important trading partner.

In light of the extreme importance of Egyptian-Chinese cooperation at this stage, the motives and reasons for the interest of the two countries in strengthening cooperation to reach its current and future strategic level can be traced as follows:

1- Egypt is a large and important market for Chinese products, as it is home to more than 100 million consumers. It is a gateway to promoting its products to consumers in other neighboring countries. It is also a gateway to more than a billion consumers from countries where goods produced in Egypt enjoy preferential treatment.

2- Egypt represents commercial importance in the context of the Belt and Road Initiative, which is one of the most important Chinese initiatives to stimulate trade for China and the Silk Road countries, given that the Suez Canal is a major station on the maritime route of the initiative.

3- China represents a large and important investor for Egypt that helps it play a pivotal and active role in the Middle East and Africa.

4- China seeks to establish logistical zones to take advantage of the Suez Canal and the Chinese Silk Road to contribute to stimulating trade between the two countries and the world.

5- China is one of the countries that have the most trade exchange with the Arab countries and Egypt. Egypt is also one of the countries that support the Belt and Road Initiative, which is one of the most important Chinese initiatives to stimulate trade for China and the Silk Road countries.

6- China and Egypt agree on political views that support Arab issues, non-interference, and support for Arab countries that suffer from crises and conflicts. China and Egypt have always been in a state of mutual support and cooperation in light of the Corona pandemic and other crises of revolutions and combating terrorism.

Third: the volume of Chinese investments in Arab countries and Egypt

1- Chinese investments in Arab countries

China has established many investments and projects in Arab countries in various fields, including the Central Port project in Algeria, the Khalifa Port container terminal project in the Emirates, the Friendship Port project in Mauritania, the Mohammed VI Bridge project in Morocco, and the Lusail Stadium project in Qatar. The Attarat power plant project in Jordan, the mobile power plant project in Sohar in Amman, and the power station project in Sudan.

In 2016, China provided loans worth $30 billion to improve and develop manufacturing in the Middle East ,and the industrial production, in addition to spending on setting up investment funds worth $20 billion with Qatar and the UAE to invest in the energy sectors, especially nuclear energy, at a value of $20 billion. For Arab countries that suffer from crises and conflicts such as Palestine, Syria and Libya.

China has also established various projects in Oman such as the Chinese Industrial Zone, and in Saudi Arabia the Chinese Jazan Industrial Zone, the existence of a model garden for Chinese-Emirati cooperation in production capacity, the continuation of the Suez region project for economic and trade cooperation between China and Egypt, and the proposal of a number of projects in 2020 to be completed in Sudan such as participation In the establishment of industrial parks and the development of railways and other projects.

Table (2) shows the volume of Chinese investments and constructions in the Arab countriesDuring the period (2005-2022)

_{source:The China Global Investment tracker}

The previous table shows that the largest Arab country in which China invested for the year during the period (2005-2022) is Iraq, with investments amounting to 13.58 billion dollars, followed by Saudi Arabia with 12.78 billion dollars, then the UAE with 7.92 billion dollars, and the largest country in which China establishes construction It is Saudi Arabia with a construction volume of $36.79 billion, followed by the UAE with $29.09 billion, and then Algeria with $26.54 billion.

2- Chinese investments in Egypt

Chinese investments in Egypt have increased dramatically over the past two decades to become the sixth largest investor in Egypt with the presence of about 140 Chinese companies, as there were 35 Chinese investment projects in 2005, and by 2007 the volume of investments increased to reach 400 million dollars, An agreement to establish an Egyptian-Chinese company for the development of the Suez Canal Economic Zone and a building for investors. The aim was to attract investments estimated at $2.5 billion.

In 2010, a number of axes for joint cooperation between the two countries in manufacturing in the fields of pipes and drilling rigs, cooperation in the oil and natural gas sector, technology and labor training were established. Modern and sophisticated production of high quality products at a cost of $ 2 billion:

By 2014, 12 Chinese investors representing major multinational companies joined to invest in Egypt as the most important and largest product promotion market. In 2019, a Chinese maritime delegation was received to discuss establishing a container handling terminal in Abu Qir Port in Alexandria. The Egyptian-Chinese consortium Samcrete – CCECC – CRCC implemented the “Sokhna-Alamein” high-speed train project, at a cost of $9 billion. It was also agreed to jointly manufacture vehicles in Port Said through the establishment of a factory to manufacture vehicles in Egypt. Also among the most important joint projects are the iconic tower in the Administrative Capital, the Tenth of Ramadan Railway Project, the New Alamein City Towers Project, the Egyptian Satellite Assembly and Selection Center, and the Sat 2 Satellite Implementation Project. In 2021, memorandums of cooperation were signed in the field of green transformation. Smart agriculture, switching from oil to gas, and regulating water provision through smart irrigation. The Chinese company, Huawei, has also installed high-quality communication facilities for the population in the desert, and provides drilling services for deep wells in many provinces, and contributes to the training and qualification of human cadres.

Table (3) showing the volume of Chinese investments and constructions in Egypt according to sectors during the period (2005-2022)

It is clear from the previous table that the sectors in which Chinese investments were concentrated in Egypt during the period (2005-2022) are the energy sectors, followed by mining and then real estate, and the sectors in which construction was concentrated are the real estate sectors, followed by energy and transportation.The “Egyptian-Chinese Businessmen” Foundation was launched with the aim of pushing for more Chinese investments in the Egyptian market, deepening partnership relations, ensuring continuous and constructive communication between the two parties, and removing any obstacles that may face efforts to maximize investments.

The world is going through a state of highly polarized instability between the international powers, and in light of the current state of uncertainty and ambiguity at the level of the foreign policy of the major countries, Sino-Arab relations are gaining unprecedented momentum in general, and Egyptian-Chinese relations in particular. China aims, through international expansion in the Arab and African countries, to reach markets closely, in addition to using the wealth, minerals and energy resources of these countries, which are the lowest price ever, thus enhancing China’s economic role globally, which prompted more presence of Arab relations with China in an official framework. The founders are the opposite of what existed, which can be attributed to the decline of the American role in the region years ago.

In light of the increasing volume of Chinese investments globally, especially in the countries of the Middle East and Africa, and dealing with the US dollar as a basic currency that gains great strength against other currencies whenever the demand for it increases, China has recently tried to put forward the idea of ​​dealing in the Chinese currency, the Chinese yuan, in its dealings with countries, and this depends on the acceptance of countries The strength of the Chinese yuan and the global demand for it, especially in light of China’s continued trend towards ascending to the tops of the world’s powerful economies.

Here we refer to the fact that there are temporary disturbances in the converging economic and political systems from the East Pole, led by China, as a result of the current economic and political systems in the Arab region being linked to the global economic system led by the United States of America and Europe. In light of the increasing severity of the global economic crisis, the Arab countries are moving towards strengthening their relations with China, and pushing for further deepening of dependence on the Chinese side in supporting their financial markets.