Cairo - Ten years after his last visit to Cairo, Chinese President Xi Jinping is returning to a very different world.
In 2016, China was expanding the Belt and Road Initiative, while Egypt was seeking investment, financing and foreign currency. Their relationship was entering a new phase after being upgraded to a comprehensive strategic partnership in 2014.
By 2026, that equation had changed.
China is looking for greater supply-chain resilience, safer maritime routes, production bases closer to major markets, and a broader presence in technology and advanced industries.
Egypt, meanwhile, is looking for high-quality investment, local manufacturing, technology transfer, greater exports and a wider network of international partners.
That is where their interests converge.
The visit also comes in the year marking 70 years of diplomatic relations between Egypt and China. Egypt was the first Arab and African country to establish diplomatic ties with the People’s Republic of China, on May 30, 1956.
Over seven decades, the relationship evolved from political solidarity and anti-colonial cooperation into a broad economic and strategic partnership, culminating in the comprehensive strategic partnership announced in 2014.
In a message marking the 70th anniversary, Xi described Egypt-China relations as a model of cooperation among developing countries and called for stronger strategic coordination, development synergies and international influence.
Over the past years, Chinese economic engagement in Egypt has expanded across infrastructure, energy, transport and manufacturing.
The China-Egypt TEDA Economic and Trade Cooperation Zone in Ain Sokhna has become one of the clearest examples of this presence, developing into an industrial base for Chinese companies producing for regional markets.
But the next phase could involve a fundamental shift in the nature of Chinese investment.
According to Emad Al-Azraq, a member of the Egyptian Council for Foreign Affairs and a writer specializing in Chinese affairs, the economic file is one of the key issues on Xi’s agenda in Cairo.
Emad Al-Azraq, a member of the Egyptian Council for Foreign Affairs and a writer specializing in Chinese affairs. (Photo/Ayman El-Kady, Bridging News Cairo Bureau)
Egypt, with its geographic position and extensive economic links with Arab, African and European markets, can become a Chinese industrial and logistics hub for production and redistribution, Al-Azraq says.
“China has already begun moving many industries to Egypt to bring production closer to global markets,” he says, arguing that Xi’s visit could accelerate this trend.
That vision closely echoes the argument made by political science professor Nevine Wahdan, who says the partnership is a transition from “investment in Egypt” to “production from Egypt”.
Political science professor Nevine Wahdan. (Photo/Ayman El-Kady, Bridging News Cairo Bureau)
Chinese projects, she argues, should not simply bring capital into the country. They should become integrated into local supply chains, increase local content, transfer technology, develop skills and support exports.
That shift changes the economic question. Cairo no longer needs only Chinese companies to build factories in Egypt. It needs those factories to employ Egyptian workers and expertise, use more local inputs and produce goods for global markets.
That puts electric vehicles, solar power, energy equipment and water desalination alongside artificial intelligence, space technology and other advanced industries.
Al-Azraq expects the next phase to focus more on localizing advanced Chinese technologies and industries, with opportunities in green hydrogen, wind and solar power, electric vehicles, space technology and higher-value processing of Egypt’s natural resources.
Few places bring Egyptian and Chinese interests together as clearly as the Suez Canal Economic Zone.
For Egypt, the zone offers a way to turn its geography into production, investment and exports. For China, it could combine manufacturing, logistics and re-exports to Africa, the Middle East and Europe.
Wahdan describes the goal as moving “from the geography of transit to the geo-economics of value-added.”
The canal’s value to China is no longer limited to carrying Chinese goods. The larger opportunity is to manufacture some products nearby, store them and distribute them across multiple markets.
Al-Azraq says Egypt could become an ideal production base for Chinese companies because of its infrastructure, industrial zones, strategic location and trade agreements with Arab, African and European markets.
That potential has become more important amid disruptions to Red Sea shipping. For China, which relies heavily on maritime trade, reducing supply-chain risks, diversifying production and maintaining market access are increasingly connected.
Political researcher Samir Ramzy points to growing cooperation in energy and trade, including projects in wind power and commercial shipbuilding, alongside Chinese interest in developing Egypt’s digital and technological infrastructure.
Political researcher Samir Ramzy. (Photo/Ayman El-Kady, Bridging News Cairo Bureau)
For Beijing, Egypt offers a rare combination of strategic geography, political influence and connections across the Arab world and Africa. For Cairo, China brings investment, industrial capacity, market access and technological expertise.
Technology is therefore becoming more than another area of economic cooperation. Wahdan says artificial intelligence, the digital economy, new energy, space and advanced communications are increasingly tied to technological sovereignty and national security.
The key question is no longer simply whether China will transfer technology to Egypt. It is whether Egypt can build the capacity to use and further develop that technology itself.
That puts universities, research institutions, training and human capital at the center of the partnership.
The Cairo-Beijing relationship extends beyond factories, ports and energy projects. A parallel financial framework is also taking shape.
In June, the Central Bank of Egypt and the People’s Bank of China renewed their bilateral currency-swap agreement for three years and increased its value to 30 billion yuan, according to statements cited in the source material.
The agreement supports wider use of local currencies in trade and investment, while advancing China’s efforts to expand the yuan’s international role. For Egypt, it could facilitate trade with China without adding pressure on demand for U.S. dollars, while lowering some transaction costs and exchange-rate risks.
Local-currency financing could ultimately become part of the infrastructure underpinning further growth in bilateral trade and investment. If factories are the partnership’s visible face, currencies and financing mechanisms are its less visible foundation.
The author was the former head of Middle East News Agency Beijing Bureau.
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