Chinese businesses are planning major investments in Egypt, reports Sherine Nasr Last week, Cairo played host to 65 Chinese businessmen representing some 25 major companies who came to Egypt to investigate investment opportunities and look for local trade partners. "This visit will shed more light on the ever-growing role which the private sector in both countries can play in improving trade and investment," said Fayza Abul- Naga, minister of state for international cooperation. Although the trade balance is in favour of China -- Chinese exports to Egypt in 2003 amounted to $937 million as opposed to Egypt's exports to China which amounted to $150 million for the same period -- Egypt has a lot to offer China. According to Mohamed El-Ghamarawi, head of the General Authority for Investment and Free Zones (GAFI), foreign investors can now make the most of major incentives provided under the Investment Law of 1997. "These [incentives] include full ownership of the project; no restrictions on pricing the product; free movement of capital and tax exemption for a period of 5 to 25 years depending on the location of the project; in addition to a flat- rate custom duty of 5 per cent on export manufacturing equipment," he explained. More trade facilities are provided under Law 22 of April 2004, which stipulates that GAFI is the only authority which can issue licences for new projects. "The process should ultimately take 15 days and more incentives can be provided to international companies which are looking to make Egypt an export centre for their products," said El-Ghamarawi, adding that Egypt is the gateway to the Arab countries and the EU. Incentives like these over the past few years have managed to attract more foreign investments to Egypt. "Egypt now has 31,314 projects, representing an investment of LE401 billion. The volume of Direct Foreign Investment (DFI) including oil projects was $3 billion in 2003," said El- Ghamarawi. At present, there are some 104 Chinese companies in Egypt who are estimated to have invested LE1 billion. The volume of investment is expected to increase over the next few years as Egypt is believed to have a lot to offer. "Egypt's capacity in the fields of agricultural equipment, construction materials, engineering, pharmaceuticals, petrochemicals, mining, and others, is still under-exploited" said Abul-Naga. Chinese and Egyptian officials agreed to kick-start investment with two major projects in the north-west, on the Suez Canal, at an initial cost of $100 million. The projects involve building a container terminal, a dry port and a workshop to build containers. Egypt resumed diplomatic relations with China in 1956. Since then, economic relations between both countries have been growing steadily. However it was only in 2002, when President Mubarak visited Peking, that more definite steps were taken towards establishing solid cooperation in various economic fields.
