Egypt Opens Up to China: Numerous Suez Canal Agreements Signed

China invests $800 million in innovative polyester and fiberglass production

Waleid Gamal El-Dien

Attacks by Yemeni Houthis in the Red Sea are taking a huge financial toll on Egypt, where maritime traffic through the Suez Canal to and from the Mediterranean Sea has been cut by 50% in recent months. In order to at least partially compensate for the financial losses, the Suez Canal Economic Zone has signed 14 agreements with a number of large Chinese companies that intend to set up production in Egypt and develop numerous projects in the North African country. As Waleid Gamal El-Dien, head of the economic department of the Suez Canal Authority, said at a recent Egyptian-Chinese economic cooperation conference, “the Suez Canal agreements will build on the experience of the Egyptian-Chinese Teda-Egypt cooperation, where China has invested $2 billion and where 150 Chinese industrial and logistics companies now operate.”

Egyptian authorities are seeking to diversify the economic focus of the Suez Canal: in the second half of 2023 – first quarter of 2024, the Free Economic Zone managed to attract 128 projects as residents, ranging from industrial production to logistics and port services, with a total investment of more than 3 billion dollars, of which 40% is Chinese investment. Among the major investment agreements is an $800 million agreement between Egypt’s Teda Group and China’s Shin, which involves the production of special Glass Reinforced Polyester (GRP) fiber. In the first phase of the project (2026), the Chinese-Egyptian plant will have to produce up to 300 thousand tons of fiberglass per year, at full capacity the production capacity will be one million tons per year.