China signed investment and aid deals worth billions of dollars with Egypt during a visit yesterday by President Xi Jinping and expressed support for Cairo’s efforts to maintain stability, which have included a crackdown on dissent.
Xi arrived in Egypt on Wednesday on the second leg of a Middle East tour that signals China’s push for greater influence in a region that provides vital oil supplies.
The visit, just before the January 25 anniversary of the 2011 uprising that ousted Hosni Mubarak, is seen in Egypt as a vote of confidence in President Abdel Fattah al-Sisi’s administration, whose human rights record has attracted criticism elsewhere.
Xi praised Egypt’s efforts to strengthen its economy during talks with Sisi, who has warned his critics not to hold protests on Monday.
“China supports Egypt’s efforts to maintain stability, develop the economy and improve livelihoods, and ... play an even greater role in international and regional affairs,” Xi said, according to China’s foreign ministry.
Egypt has struggled to spur economic growth since the 2011 uprising ushered in political instability that scared off tourists and foreign investors, key sources of foreign currency.
Heralding a new era of closer political and economic ties, officials from the two countries signed 21 deals at a ceremony in Cairo that could ramp up Chinese investments in the most populous Arab country.
The deals span several development and infrastructure investments, including the first phase of a new Egyptian administrative capital announced last year, a $1bn financing agreement for Egypt’s central bank and a $700mn loan to state-owned National Bank of Egypt.
In a speech to the Cairo-headquartered Arab League, Xi also outlined multi-billion dollar investment plans for the wider Middle East.
China would dedicate $15bn in special loans to boost industrial production in the region, $10bn in trade credit for joint energy projects and another $10bn in soft loans, Xi said.
China, the world’s second biggest economy, relies on the Middle East for oil but has tended to leave regional diplomacy to the other four permanent members of the UN Security Council, the US, Britain, France and Russia.
It has however been trying to get more involved, especially in Syria, and recently hosted Syria’s foreign minister and opposition officials.
Speaking earlier at a joint news conference, Sisi, who visited China in 2014, said economic and military co-operation had developed quickly to reach unprecedented levels.
“We discussed in our consultations the need to redouble our common efforts in various bilateral and international areas to combat the danger of terrorism and extremism,” Sisi said.
In the same news conference, Xi said 32 Chinese companies were now working in Egypt’s Suez Canal economic zone, investing more than $400mn and these figures would rise to 100 firms and $2.5bn with the next phase of the project.
China and Egypt are also planning 15 projects in electricity, infrastructure and transport with investments that could total $15bn, Xi said.
China’s $1bn central bank loan could help bolster foreign reserves, which have more than halved since 2011 as it battles to defend the currency against downward pressure, while longer-term investments could help create much-needed jobs.
Mindful that economic discontent helped to unseat two presidents in the last five years, Egyptian security forces have arrested several activists and shut down cultural spaces in recent weeks to prevent protests as the anniversary approaches.