China-Egypt Bilateral Trade and Investment Opportunities

• China and Egypt are strengthening ties in digital infrastructure, AI, fintech, and space technology. Huawei and ZTE are leading Egypt’s digital transformation, while China is supporting Egypt’s satellite development and remote sensing capabilities.
• Despite strong ties, Egypt’s investment climate presents hurdles such as regulatory barriers and trade imbalances, with concerns over Chinese surplus goods and industrial emissions.
• The partnership is expected to expand beyond infrastructure into green energy and deeper financial collaboration, with Egypt exploring yuan-denominated bonds and China increasing its role in Egypt’s industrialization.

China and Egypt have long-standing diplomatic ties, with Egypt becoming the first African, Middle Eastern, and Arab nations to establish official relations with China in 1956. Over the past decade, this relationship has evolved into a dynamic economic and strategic partnership, culminating in what has been referred to as the “golden decade” of China-Egypt relations. The beginning of 2025 marked the conclusion of the Year of the Egyptian-Chinese Partnership, a milestone underscoring the growing breadth of cooperation between the two nations.

Since 2014, under the leadership of Chinese President Xi Jinping and Egyptian President Abdel Fattah el-Sisi, the two countries have deepened their comprehensive strategic partnership. Egypt has become a key hub for Chinese investment in the Middle East and North Africa (MENA), playing a vital role in Beijing’s Belt and Road Initiative (BRI). The Suez Canal Economic Zone (SCZone) has emerged as a focal point of Chinese economic activity, with investments exceeding US$3 billion and accounting for 40 percent of foreign direct investment in the past two years, according to official data. Chinese companies have signed multi-billion-dollar agreements in infrastructure, energy, and technology, reinforcing Egypt’s role as a gateway to African and European markets.

Egypt’s economic motivations for strengthening ties with China are clear. Amid high inflation, declining Suez Canal revenues, and a reliance on external financial support, the Egyptian government views China as a critical partner with both the capacity and willingness to invest. However, the relationship is not without its challenges. Trade imbalances persist, with Egypt’s exports to China overwhelmingly composed of raw commodities—particularly energy—raising concerns about the long-term sustainability of this economic dynamic.

Beyond trade and investment, China and Egypt have expanded cooperation into new sectors, including technology, artificial intelligence, and defense. In 2024, joint naval exercises in the Mediterranean, discussions on arms procurement, and increased military exchanges signaled a shift toward deeper security engagement—albeit from a low starting point. While rumors of Egypt purchasing Chinese J-10C fighter jets remain unconfirmed, they reflect Cairo’s broader strategy of diversifying its defense partnerships.

In this article we examine the key sectors shaping China-Egypt economic relations, the challenges that remain, and the opportunities ahead for deepening trade and investment in this evolving partnership.

China-Egypt economic ties 

The development plans carried out under Sisi’s and Xi’s governments, known respectively as the BRI and Egypt Vision 2030, mutually reinforce and support one another. On the one hand, given its geographic location and economic potential, Egypt is in a unique position to assist China in advancing the BRI throughout the Middle East. On the other hand, the expansion of the Suez Canal for maritime and inland transportation is given top priority in the Sisi administration’s Egypt Vision 2030, which entered its implementation phase in February 2016 and aligns with the BRI’s goals in the region.  

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The Sisi administration has also worked to strengthen its economic ties with China to advance Egypt’s industrialization. Considering this, China and Egypt also established deeper financial ties. Many Egyptian-funded banks, as well as Egyptian-foreign equity joint banks, offer Renminbi (RMB) and Egyptian Pound (EGP) exchange services as of 2022, and their ATMs recognize UnionPay cards. As Egypt needed to stabilize the EGP, the People’s Bank of China (PBOC) and the Central Bank of Egypt (CBE) signed an agreement in 2016 on an RMB18 billion (US$2.6 billion) local currency swap over the next three years. The China Development Bank (CDB) also provided loans of US$1.4 billion to Egyptian financial institutions that year, of which US$900 million went to the Central Bank of Egypt. 

Egypt is the first Middle Eastern nation to get financial assistance from the Asian Infrastructure Investment Bank (AIIB). Up to US$210 million in loan funding was announced by the AIIB in September 2017 to assist the construction of 11 solar power projects in Egypt. It is precisely through the work of development financial organizations like the China-Africa Development Fund (CAD Fund), the Silk Road Fund, and the AIIB, that China has contributed to and funded significant Egyptian projects. 

China-Egypt bilateral trade 

Trade between China and Egypt remains strongly in favor of China, with Chinese exports significantly outweighing Egyptian exports. Over the past 25 years, China’s exports to Egypt have expanded at an annual rate of 14.4 percent, while Egypt’s exports to China have grown at an average rate of 17.9 percent.

China has firmly established itself as Egypt’s top commercial partner during the Xi-Sisi era, with economic cooperation deepening in multiple sectors, particularly infrastructure, industrial zones, and technology transfer.

In 2023, China exported US$13.3 billion worth of goods to Egypt. The leading export categories were:

• Electrical and electronic equipment – US$2.50 billion
• Machinery, nuclear reactors, and boilers – US$2.01 billion
• Manmade filaments – US$0.97 billion
• Plastics – US$0.85 billion
• Vehicles (excluding railway and tramway) – US$0.84 billion

This marks a shift from 2020, where key exports included broadcasting equipment, synthetic filament yarn, and LCDs. The new data highlights Egypt’s growing demand for industrial and high-tech equipment, aligning with its ambitions to modernize its economy and infrastructure.

On the other hand, Egypt’s exports to China, while increasing in value, remain modest in comparison to Chinese imports. In 2023, major Egyptian export categories included:

• Crude oil
• Refined oil
• Citrus and agricultural products

China continues to be a key buyer of Egyptian energy resources and agricultural goods, but the trade imbalance persists.

As Egypt continues to deepen economic ties with China, opportunities exist for diversifying exports, enhancing industrial collaboration, and attracting more Chinese investment into local manufacturing sectors.

China-Egypt bilateral investment 

Chinese investment in Egypt has dramatically increased during the past 10 years. In 2017, China rose to become the sixth-largest investor in Egypt. A Report from the Arab Investment and Export Credit Guarantee Corporation states that between 2013 and 2019, China invested US$28.5 billion in the Arab region and created 23,930 jobs, making Egypt the recipient of the most jobs overall – most of them created by China.  

More than 140 Chinese businesses have made investments in Egypt. Chinese investment in Egypt has been mostly focused on industrial projects (55 percent), construction (20 percent), and services (12 percent).  

Egypt is now the third-biggest producer of fiberglass in the world thanks to the Suez Economic and Trade Cooperation Zone (SETCZ), which is by far the largest Chinese manufacturing initiative in Egypt in terms of investment volume. By the end of 2018, SETCZ had drawn over US$1 billion in investment, primarily from Chinese businesses, and contributed to the creation of more than 3000 employment for locals.  

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The Central Business District (CBD) project in the new administrative capital city is among the major infrastructure projects in Egypt’s construction, energy, transport, commerce, and industrial sectors where China has played a significant role. Since March 2018, the China State Construction Engineering Company (CSCEC) has been working on the CBD and it is by far the biggest infrastructure undertaking in Egypt. In particular, the CSCEC is responsible for finishing the construction of a zone of towers in the new administrative capital, including a 345-meter tower that may eventually set a record for height in Africa. 

China and Egypt have increased their collaboration in regional port interconnection in addition to continuing the SETCZ’s construction. Sisi was present for the MoU signing between the Chinese company, Hutchison Ports, and the Egyptian Naval Forces in August 2019 to develop a container handling terminal in Abu Qir Port. Alexandria and El Dekheila, Egypt’s two principal commercial ports, are already run by Hutchison Ports.    

Opportunities and key cooperation areas

As of 2025, China and Egypt have continued to deepen their economic and strategic ties, with cooperation expanding into key sectors that align with both countries’ strategic development plans. The partnership has moved beyond traditional trade to focus on infrastructure development, energy transition, industrial production, and digital transformation, positioning Egypt as a key regional hub for Chinese investment. 

Infrastructure and transportation

China has played a crucial role in Egypt’s ambitious infrastructure projects, particularly in the construction of the New Administrative Capital (NAC). The Central Business District, home to Africa’s tallest skyscraper, is a flagship project undertaken by China State Construction Engineering Corporation (CSCEC), symbolizing the depth of China’s involvement in Egypt’s urban expansion.

Beyond real estate, Chinese firms are investing in Egypt’s transport networks, contributing to the electrification of railway systems and the expansion of metro lines. The development of the high-speed rail network, aimed at connecting key industrial and commercial hubs, has also attracted Chinese expertise and financing. Additionally, Egypt’s strategic location along major maritime trade routes has made its ports an attractive investment destination. The modernization of Ain Sokhna port, a key gateway under the BRI framework, reflects China’s efforts to enhance Egypt’s role as a regional logistics center.

Renewable energy and green hydrogen

Renewable energy has emerged as another pillar of cooperation, particularly as Egypt accelerates its transition towards a more sustainable energy mix. China’s involvement in the Benban Solar Park, one of the world’s largest solar energy projects, has strengthened Egypt’s position as a leader in renewable energy in Africa.

Chinese firms have also entered Egypt’s green hydrogen sector, with several agreements signed to develop production facilities in the Suez Canal Economic Zone (SCZone). As demand for green energy solutions grows, Chinese companies are expected to play a key role in Egypt’s efforts to become a major hydrogen exporter to Europe and other markets.

Industrial collaboration and special economic zones

Industrial cooperation between the two countries has deepened, with Chinese firms expanding their presence in Egypt’s special economic zones. The Tianjin TEDA Suez Economic Zone has become a focal point of investment, attracting over 150 Chinese manufacturers in industries such as textiles, construction materials, electronics, and automotive components.

Egypt’s preferential trade agreements with Africa and Europe make it an attractive manufacturing base for Chinese firms looking to access new markets. The automotive industry, in particular, has gained momentum, with Chinese electric vehicle (EV) manufacturers like BYD and Chery investing in local assembly plants. While Egypt aims to develop a domestic EV ecosystem, including battery production and charging infrastructure, Chinese automakers are well-positioned to support this transition. 

Digital economy and smart technologies

Beyond traditional industries, the digital economy has become a key area of engagement between the two countries. With the rise of smart city initiatives and digital transformation, Chinese tech firms such as Huawei and ZTE have expanded their involvement in Egypt’s telecommunications sector. These companies are not only helping roll out 5G infrastructure but are also collaborating on AI-driven smart governance solutions.

Additionally, the fintech sector has seen increased Chinese interest, with digital payment platforms and AI-driven financial services entering the Egyptian market as part of broader efforts to promote cashless transactions and e-government initiatives.

Outlook for 2025 and Beyond

China and Egypt’s economic partnership is set to deepen further in the coming years, driven by their shared ambitions under Egypt’s Vision 2030 and China’s Belt and Road Initiative (BRI). Sectors such as energy, technology, and advanced manufacturing will continue to see increased collaboration, with Egypt positioning itself as a regional hub for Chinese investment.

A significant area of expansion is the Digital BRI, where China and Egypt have intensified cooperation in telecommunications, AI, and fintech. Chinese firms such as Huawei and ZTE are playing a key role in Egypt’s digital transformation, from rolling out 5G infrastructure to supporting smart governance and e-commerce development. Egypt’s Information Technology Industry Development Agency (ITIDA) has partnered with Huawei to provide AI and cloud computing training to Egyptian businesses, particularly in gaming, data management, and cybersecurity. This reflects a broader push to integrate China’s technological expertise into Egypt’s emerging digital economy.

Another frontier in bilateral cooperation is space technology. China is actively supporting Egypt’s ambitions to develop its space capabilities, particularly in satellite production, remote sensing, and telemetry tracking. The partnership between Egypt’s National Remote Sensing Space Science Bureau and China’s National Space Administration has enhanced data-sharing efforts for applications such as resource exploration, environmental monitoring, and crop yield estimation. This aligns with Egypt’s goal of leveraging space-based technologies for national development and security.

However, while China sees Egypt as a key partner, certain challenges remain. Egypt’s economic performance and investment climate still present hurdles for Chinese businesses. Issues such as access to capital, customs regulations, business licensing, and land acquisition continue to complicate the operating environment for foreign investors. Additionally, China’s dominance in bilateral trade has raised concerns about trade imbalances and the risk of Egypt absorbing surplus Chinese goods or high-emission industrial capacity. These factors require careful negotiation to ensure mutually beneficial trade dynamics.

Despite these challenges, the momentum behind China-Egypt relations remains strong. China has supported Egypt’s efforts in global diplomacy, including preparations for hosting the UN Climate Change Conference in Sharm el-Sheikh. Moreover, Chinese investments in Egypt’s industrial sector, such as the Haier Group’s new home appliance manufacturing complex, indicate a growing commitment to local production and job creation. Meanwhile, Egypt is exploring new financial instruments to deepen its financial integration with China, including the potential issuance of bonds denominated in Chinese yuan.

Looking ahead, China and Egypt’s strategic partnership is expected to evolve beyond infrastructure and trade toward high-tech cooperation, green energy, and regional economic integration. As Egypt seeks to modernize its economy and attract further foreign direct investment, China will remain a key player in its industrial and technological transformation. The prospects for investors in both countries remain optimistic, provided that regulatory frameworks continue to improve and economic ties are managed with long-term sustainability in mind.

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