Egypt and China in investment deal

Click here: Zawya.com – Egypt and China in investment deal

Egypt said on Tuesday it had reached agreement with China on setting up an industrial zone that it hopes will attract $2.5bn in Chinese investment. Rachid Mohamed Rachid, Egypt’s trade minister, said the 5 sq km park in the Suez area would be built in phases over the next 10 years and be financed, developed and managed by TEDA, a Chinese company.

It is thought to be the first Chinese government-backed manufacturing zone in the region and will provide Chinese companies with an export hub for Europe, the Middle East and Africa. Companies setting up in the zone are expected to make textiles, gas and oil pipes, electronics and cars and car components. The move reflects Egypt’s efforts to boost foreign investment by marketing its strategic location and its trade agreements with the US, Europe, Africa and the Middle East, as well as cheap energy and labour costs.

…Factories in the zone would also add value to Egyptian raw material exports to China, such as yarn, cotton and marble, he added, and help create a “win-win” situation in the face of China’s growing global economic influence. …The Chinese government has also agreed to provide $200m in low interest loans – with a grace period of up to seven years – to Egyptian manufacturers who want to import production lines and other equipment from China, the trade ministry said.

Liao Xiaoqi, China’s vice minister of commerce, was in Egypt on Tuesday for the announcement of the zone, Egyptian officials said. Chinese exports to Egypt from the beginning of the year to September reached $2.9bn, a 50 per cent increase on the same period in 2006, while Egyptian exports to China totalled $164m, a 23 per cent increase. The United States is Egypt’s biggest single trading partner with $6.7bn in total trade for 2006, but Mr Rachid expects China to overtake the US within the next six years.

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