Sherine Nasr examines how economic cooperation between Egypt and China is booming Egyptian-Chinese economic relations have been advancing in leaps and bounds lately, despite the fact that trade figures between the two countries are rather alarming. Trade has always been in favour of China, with Chinese exports to Egypt approaching $3 billion in 2006, compared to $250 million worth of goods in the other direction. Nevertheless, 2006 demonstrated that very promising prospects of economic cooperation are maturing, and experts believe that some concrete results will be achieved soon. "The notion that China is solely an exporter and not an importer is widely misleading," argued Magdy Amer, deputy assistant to the foreign minister for East Asia, during a roundtable discussion organised by the Egyptian Businessmen's Association (EBA) on 30 January. "China is a country that imports almost everything and it represents a huge potential market for Egyptian goods." He revealed that Egypt's target is to reach $1 billion worth of exports to China by the year 2009. During the event, which was attended by the Chinese Ambassador to Egypt Wu Sika, EBA members announced the launching of Committee 18 focused on economic ties between the two countries. Committee 18 is composed of businessmen and senior officials from both sides to oversee the latest developments in Egyptian-Chinese economic relations, investigate obstacles and provide solutions. "Both governments are committed to consolidate their economic relations," asserted Sika. "The committee will be an effective way to carry out this task." He added, 18 is believed to be a lucky number in China. The visit by China's Prime Minister Wen Jiabao to Egypt in June last year, followed by President Hosni Mubarak's visit to China in November, resulted in the conclusion of 10 agreements which will enhance cooperation in many vital sectors. These include Egypt exporting oranges to China and the creation of a one stop- shop in the North East of the Gulf of Suez Specialised Economic Zone through a Chinese grant. The Industrial Development Bank in China also signed agreements with the Social Fund for Development to finance feasibility studies for the private sector. According to Cao Jiachang, the Chinese commercial counsellor to Egypt, a high ranking Chinese delegation of major companies headed by the deputy minister of commerce will visit Egypt soon to study means of enhancing trade relations. "A one-to-one meeting will be held between businessmen to encourage potential business partners to meet and conclude deals," stated Jiachang. These measures and others should increase Chinese foreign direct investment (FDI) in Egypt, currently estimated at $300 million. "This is hardly a satisfactory figure," said Amer, adding that the General Authority for Investment and Free Zones (GAFI) has drafted an ambitious plan to attract more Chinese FDIs, particularly into specialised economic zones in Egypt. Egypt is a vital partner to China in the region, since it "can be China's gateway to the Middle East, Africa and the EU," advised Amer. And naturally, Egypt has good reason to engage with China in robust relations. The past five years have seen China growing constantly and steadily in a manner that is both unprecedented and hardly comparable to any other economy in the world. For example, China reached $3 trillion in GDP, in 2006; its exports exceeded $7 billion, with high tech exports growing by 100 per cent; more significantly, a number of open-door policies were lately adopted by Beijing to encourage more FDIs into the country. In the banking sector, China is now open for foreign banks which is a major step to encourage Egyptian banks to set up shop in China. "The National Bank of Egypt has already been approved to open a branch in Shanghai, and other Egyptian banks should follow suit," asserted to Amer. "This will make things easier for Egyptian businessmen." Tourism is another potentially rewarding sector of cooperation between the two countries, but it is yet untapped. Already, restrictions on opening foreign tourist and airline offices in China will be abolished in July, which will pave the way for Egyptian companies to have a permanent presence on the Chinese market. According to Atef Hassan, head of the Asia Department at the Commercial Representation Services, the increase in the volume of Chinese tourists is the highest worldwide. "Chinese tourists to other countries are increasing by almost 40 per cent annually," Hassan told the gathering. "A few years ago, Egypt received almost none, but last year some 40,000 Chinese tourists visited the country. The number is expected to triple during the next two years." Further the national carrier EgyptAir is planning to fly daily to Beijing.
