$16.25 billion...An increase in the volume of trade exchange between Egypt and China

Dr. Fakhri El-Feki, Chairman of the Plan and Budget Committee of the Egyptian House of Representatives, said that the debt swap program agreement between Egypt and China is a continuation of economic and trade cooperation between the two countries, referring to an agreement previously signed by Egypt and China to swap currencies worth 18 billion yuan ($2.6 billion). In 2016, it resulted in a boom in trade exchange, and eased pressure on the dollar by adopting currency swaps for a portion of Egyptian imports.

Trade exchange between Egypt and China

The volume of trade exchange between Egypt and China rose to $16.25 billion in 2022 - according to data from the Central Agency for Public Mobilization and Statistics, divided between $14.4 billion Egyptian imports from China, and $1.85 billion Egyptian exports to China.

As of the end of last May, 2,418 Chinese companies are investing in Egypt with a source capital of $1.1 billion, with 47% concentrated in industrial activity in the fields of fiberglass, home appliances, textiles, food industries, and animal feed, according to official data.

Encouraging the growth of Chinese investment

Al-Feki added, in press statements, that the new agreement contributes to encouraging the growth of Chinese investments in Egypt, and enhances trade exchange between the two countries, in addition to alleviating the pressure on foreign exchange needed to repay debts and finance Egyptian imports, but at the same time, it will not contribute to resolving the foreign exchange deficit. Which requires the need to increase the volume of foreign direct investments, and the government is already working to increase these investments.

Investing $15.5 billion in Egypt

Seven Chinese companies signed agreements and memorandums of understanding to invest $15.5 billion in Egypt in projects to establish a green hydrogen factory with investments of $6.75 billion, a potassium chloride production complex with investments of $8 billion, and 3 factories for the production of iron pipes, polished glass, and bromine worth $755 million, in addition to expansions worth $755 million. $18 million in a factory to produce optical cables.

China's Belt and Road Initiative

Egypt is contributing to China's "Belt and Road" initiative by expanding the navigational course of the Suez Canal, in addition to expanding the development and modernization of Egyptian ports, linking through a road and railway network between Egyptian ports on the Red and Mediterranean seas, and establishing dry ports, in order to realize the idea of logistical corridors that serve... Global trade, according to a press release by Egyptian Prime Minister Mostafa Madbouly.

US stocks and bonds

On a related note, Chinese investors sold the largest amount of US stocks and bonds in four years in August, which increased speculation that Beijing had taken a step to give itself greater strength in its defense of its weak currency, the renminbi.

About $15 billion of the total net sales of $21.2 billion came from the disposal of U.S. Treasuries, according to data from the U.S. Treasury Department, which tracks trades made by investors such as China's central bank, mutual funds and retail investors.

Stock sales totaled about $5 billion — a record for monthly sales of US stocks by Chinese investors — while investors also sold agency bonds, that is, those issued by government-linked companies.