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Egypt serves as a vital connector between Asia, Africa, and Europe, increasingly drawing in Chinese investments due to its strategic position, open economic climate, and strong dedication to reforms.
Officials from a high-level Egyptian delegation, participating in the second China-Egypt Investment and Innovation Forum at Fudan University’s School of Management in Shanghai yesterday, expressed readiness to host more Chinese investors.
Currently, approximately 2,850 Chinese companies operate within Egypt, with their combined investments surpassing $8 billion USD.
“For the past three years, Egypt has been the top recipient of foreign direct investment across the entire African continent,” stated Ahmed Zoheir, the head of Egypt’s Central Administration for Attracting Foreign Investment.
Last year, Egypt’s foreign direct investment (FDI) inflows skyrocketed to $46.1 billion, moving from 32nd place to ninth globally. This growth highlights the success of the country’s vigorous reforms aimed at making its business environment more inviting, resilient, and efficient.
Egypt’s advantages include its advantageous location, a youthful and skilled workforce exceeding 31 million, a network of trade agreements with more than 70 nations, and highly competitive utility rates, Zoheir explained.
The government has introduced a range of appealing policies, including tax incentives like a decade-long exemption from land use fees, pre-tax deductions for investments, and the establishment of free trade zones, technology parks, investment zones, and the Suez Canal Economic Zone.
Capitalize on these incentives, which aim to ease capital investments directly — for example, Zoheir noted that a $1 million investment can receive $500,000 in tax refunds over seven years, effectively halving the real capital expense of large projects.
Another noteworthy initiative is the “golden license,” a fast-track procedure enabling businesses to operate immediately upon approval. “Recently, we issued golden licenses to three major Chinese firms—Haier, Midea, and Xinxing—as a clear signal of our commitment to accelerating and supporting significant projects,” he said.
Real-world Application of Policies
The Suez Canal Economic Zone exemplifies successful China-Egypt collaboration. Mostafa Shekhoun, deputy chairman of the zone, emphasized the importance of trust, which is fundamental to business dealings and investments.
Asked how this 455-square-kilometer hub, composed of four industrial zones and six ports, attracted 40 factories—including 25 operated by Chinese firms—within a short timeframe, Shekhoun explained: “Building trust requires transparency.”
He added that when a Chinese investor questions power supply adequacy, he offers full transparency rather than empty promises, engaging proactively to address all concerns.
Regarding the zone’s streamlined administrative processes, Shekhoun said they employ a “one-stop” approach—consolidating all government entities in a single location, so investors can obtain approvals from a single office instead of navigating multiple departments. This approach has proved effective, with half of recent investments coming from China.
Private sector facilitators also play a vital role. Kemet Industrial Investments, backed by the government, assists investors in navigating regulations, reducing risks, and focusing on building high-quality manufacturing processes, according to General Manager Ahmed El-Abd.
The joint venture between Egypt’s Kemet Industrial Investments and China’s Huadian Switchgear illustrates how private intermediaries can connect Chinese capital with opportunities in Egypt.
Egypt’s development ambitions extend beyond industrial parks to urban growth. Khalid Abbas, head of the Administrative Capital for Urban Development, unveiled plans for a new “smart, green, sustainable city” larger than Singapore, designed to host over 10 million residents.
Transitioning from manufacturing to high technology
Although over two-thirds of Chinese investments in Egypt are in manufacturing, cooperation is expanding rapidly into other sectors such as automotive, renewable energy, electronics, pharmaceuticals, and mining.
Egyptian officials set specific goals for these areas. Yasser Ramadan, chairman of the Egyptian Mineral Resources Authority, stated the sector aims to grow its contribution to GDP from 1% to 6% by 2030, leveraging Egypt’s rich deposits of gold, phosphates, kaolin, copper, and rare earth elements.
The petrochemicals industry also presents significant near-term opportunities, with ten projects worth $13.5 billion underway in areas like soda ash, bioethanol, sustainable aviation fuel, and silicon metal, with Chinese companies involved as contractors, according to Wael Mokhtar from EMRA.
Beyond traditional sectors such as textiles, automotive, and chemicals, the Suez Canal zone actively attracts investments in emerging fields including green hydrogen, pharmaceuticals, medical devices, ICT, and data centers.
“Egypt is well-suited for green hydrogen production because it relies on solar, wind, and seawater resources,” Shekhoun stated. “Being close to Europe, which is a primary market for green hydrogen, gives us a strategic advantage.”
Cross-cultural relations
Looking ahead, the Egyptian government’s move in April to facilitate direct investment using the Chinese yuan—along with evolving financial cooperation between central banks—presents unprecedented opportunities for economic and trade growth.
However, sustainable partnerships depend on more than just financial mechanisms—they require human connections. Members of the delegation stressed the importance of cultural exchange.
“Bridging cultural gaps is crucial because many may lack awareness of each other’s traditions,” Zoheir said. “Creating synergy between our cultures is essential.”
He suggested that institutions like Fudan University should foster connections between entrepreneurs and academic institutions from both countries to deepen mutual understanding.
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