Egypt, Courted By China & Russia, Sees Exports Rise

Egypt’s Port Said, at the mouth of the Suez Canal

by Chris Devonshire-Ellis 

Egypt is being wooed by both Beijing and Moscow as a desirable trade partner and access point to the African continental market. The Egyptian President Abdel Fattah el-Sisi was one of the 40 World Leaders who attended the opening of the Beijing Winter Olympics, after which he held meetings with Xi Jinping. Xi commented afterwards that “China and Egypt “Share similar visions and strategies in defending their own interests.”

Their comprehensive strategic partnership is a model of “China-Arab, China-Africa, and China-developing world solidarity.” Xi said, with the meeting coming as el-Sisi’s government is seeking closer ties with China as it distances itself from the United States and other Western nations critical of its human rights record. Egypt is a member of the Belt and Road Initiative and is a key partner – as the Suez Canal is the only maritime connection between Africa and Asia on one side and Europe on the other.

Egypt is also a member of the African Continental Free Trade Agreement (AfCFTA) which commenced from January 1^st 2021 and which has largely abolished intra-African trade tariffs. This means it is now possibel to source products from across Africa, process them and mix them with duty free imported products from elsewhere, and then either resell the completed item back onto the African domestic market or reexport them.

That requires an Export Processing Zone with Bonded warehousing facilities. Both China and Russia are developing these at Port Said, near the Suez Canal. Bilateral trade between China and Egypt is currently running at about US$2 billion per month and rose about 18% in 2021.

Considering the Russian angle, the Egyptian Minister of Industry, Nevine Gamea stated yesterday that Egypt’s exports to Russia  rose 17.5% during 2021, reaching US$489 million.

Gamea noted that the Russian market is one of the most important Egyptian export markets, noting that the current stage is witnessing an unprecedented economic momentum between Cairo and Moscow based on the steady increase in the rates of trade exchange annually and negotiations of a free trade agreement between Egypt and the Eurasian Economic Union.

Gamea said that an Egyptian government delegation will visit Russia this month to prepare for the Egyptian participation in the Saint Petersburg conference, which will be held next June, noting that Egypt will participate in the forum’s activities with a distinguished pavilion that reflects the achievements of the Egyptian state, as the forum’s guest of honor.

Egypt has also joined the Shanghai Cooperation Organisation as a dialgue partner, as well as the Asian Infrastructure Investment Bank.

Related Reading

• China’s African Belt & Road Initiative – It’s Not What You Think It Is
• Eurasian Economic Union Free Trade Agreement Negotiations With Egypt At An ‘Advanced’ Stage