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Egypt-China relations strengthen with $2 billion factory deal

China is making major economic inroads into Egypt along with other countries in the Middle East.
This picture taken on Nov. 17, 2019, shows the Hong Kong-flagged container ship CSCL STAR sailing through Egypt's Suez Canal.

Egypt’s Suez Canal announced a deal on Thursday with a Chinese company to build a steel and iron factory. The agreement is one of a few Egyptian and Chinese entities have signed recently and demonstrates China’s growing footprint in Egypt. 

The Suez Canal Economic Zone said China’s Xinxing Ductile Iron Pipes Corporation will invest $2 billion to build a cast iron pipe and steel production facility in the zone. The purpose of the project is to make Egypt a hub for cast iron pipe production, Egypt’s state-owned news outlet Al-Ahram reported. 

Last week, the Chinese home appliance firm Haier inaugurated a factory in Egypt. The Haier Egypt Ecological Park is located in the Sharqia province of northeast Egypt, the state-run China Global Television Network reported. 

Late last month, Egypt launched a sensing satellite into space from China, according to Egypt Independent.

Why it matters: Egypt’s relations with China are rapidly improving. Egyptian exports to China increased by 20% in 2022. China has also emerged as a major investor in Egypt’s New Administrative Capital, Al-Monitor reported in December. Egypt and China also set up the Egyptian-Chinese Entrepreneurs Association in December to promote investment. 

Egypt has significant economic potential for China due to the North African country's population of more than 100 million.

Know more: China has made inroads with several Middle Eastern countries in recent years. Saudi Arabia, Turkey, Saudi Arabia and others have joined China’s Belt and Road global infrastructure initiative. In 2021, a Chinese state-owned firm opened a port in Israel. Saudi Arabia is a major oil supplier to China, and the Chinese government brokered the resumption of relations with the kingdom and Iran earlier this month. 

China’s growing influence among countries like Egypt that are aligned with the United States is a matter of concern for Washington. The previous Trump administration notably objected to Israel’s port deal with China. 

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