Egyptian-Chinese economic and trade relations have so far performed well below their potential, Niveen Wahish reports, as the president's visit to China hopes to change that "Everything is Chinese," is a phrase often repeated by shopkeepers and shoppers alike. And it is not unfounded. Chinese products have inundated the Egyptian market. In fact, around 15 per cent of Egypt's imports, the equivalent of $7.5 billion, originates in China. On the other hand Egypt's exports to China amount to only around $1.5 billion. And while Chinese exports to Egypt are huge, its investments leave a lot to be desired. They only amount to around $500 million, according to the Egyptian Ministry for Trade and Industry. A delegation headed by President Mohamed Mursi was in China this week hoping to change that. The delegation, which included 75 Egyptian businessmen as well as a handful of ministers specialising in investment, communications, tourism, trade and industry and transportation, set out to change the way Egypt does business with China and to attract more of China's $60 billion in overseas investments. During the visit, the two countries signed a series of agreements which include extending a $70 million grant to Egypt in addition to a soft loan of $200 million. The $70 million will be used to establish joint infrastructure projects in electricity and environment. It also includes offering 300 police cars. The soft loan is made available by the Chinese Development Bank to support small and medium enterprises (SMEs). The Egyptian and Chinese presidents also signed several agreements to promote economic, commercial and investment cooperation as well as in the areas of tourism and environmental protection including a memorandum of understanding for the treatment of solid waste. An agreement promoting agricultural field research was also signed. Ayman Othman, head of Egypt's Commercial Service Office in China, told Al-Ahram Weekly that Egypt could become a hub for Chinese exports and industries heading to the Middle East and Africa. Furthermore, he said Egypt needed to work on diversifying the type of goods it imports. "Rather than importing consumer goods, more machinery and Chinese technology should be imported, to help our own industries," he said. Ahmed El-Wakil, head of the Federation of Chambers of Commerce, agrees with Othman. "We need Chinese investments in Egypt," he said, pointing out that already much of our exports are raw materials that they process and re-export to us. "We should convince them to bring the processing to Egypt," he said, adding that that way Egypt would benefit from technology transfer, know-how and would create jobs. El-Wakil described Egyptian-Chinese relations in the past years as "schizophrenic". He explained that officials promote the relationship between the two countries, but when trade picks up and Egyptian importers bring in Chinese goods, the latter are often not allowed entry into the country on pretext of not meeting quality specifications. He said China has a lot of product ranges that vary in quality and price. "People revert to Chinese goods because they are cheap," he pointed out. El-Wakil, who also holds the position of head of the African Chambers of Commerce, said that China has a lot of investments in Africa in the mining, heavy industries or manufacturing sectors. "More of that should come our way," he said. But he added that Egypt might not yet be ready to receive investors. "We need security and political stability. And the state must regain its prestige." "We have turned on investors," he said in reference to disputes with investors who had concluded deals with the ousted regime. "We have to honour all our commitments and contracts signed in Egypt, regardless of when they were signed. That is the only way to regain investor trust." Egypt could offer China a market of 1.5 billion people through its various free trade area agreements with Mercosur, the EU, Turkey and Arab countries. "That advantage should not go to waste."
