In the Middle East, no matter where you go, Chinese goods and products can be seen and bought everywhere: from the souq in Aleppo to the handbag stalls in Nablus; from Syrian taxis to the public buses roaming the streets of Tehran; even many religious garments such as Islamic headscarves and hats are now Chinese made – and a lot more are readily available at the Khan al-Khalili bazaar in Cairo. Likewise, in Africa, numerous Chinese firms are busy constructing public works and repairs with the blessing of many leaders from the Third World. For Egypt, its strategic location with immediate access to three continents means China not only regards it as an important trading partner in its own right and across the Arab World, but also as a stop-over and conduit for many more lucrative opportunities north in the Mediterranean, and also further south in deepest of Africa from mining, road construction to the continent's fastest-growing sector: telecommunications. According to data supplied by the Chinese Embassy in Cairo, bilateral trade volume between the two nations reached $5.86 billion last year – a drop of 7 percent due to the economic downturn. That said, Egypt's exports to China actually grew by an astonishing 75.4 percent, amounting to $750 million. As recently as June this year, Egypt's President Mubarak hailed the ‘deep and strategic' relationship with the Asian giant, and stressed the importance of closer co-operation in all sectors during talks with high-level officials from the ruling Communist central committee. Many Chinese companies have now set up offices up and down Egypt, such as Huawei, which specializes in Information Technology and telecommunications and have based themselves in Maadi, a Cairo suburb. In 2008, Chinese investment in Egypt reached $196 million. Conversely, 13 investment projects were set up by Egyptian businesses in China, with the share of capital totaling $5.81 million. Cao Jiachang, the Chinese Economic and Trade Counselor for the Suez Economic Zone based at the Chinese Embassy in Cairo, told Bikya Masr that the African continent as a whole can expect even more investments from Chinese firms in the coming years, and that Egypt itself will also reap the benefits of some ambitious projects slated for the near future. However, the counselor also defended accusations levied by the World Bank and other organizations against China's decision to invest in countries with appalling human rights and questionable regimes. His overall responsibility is to advise Chinese companies who have either trade or economic investments within the Suez Economic Zone – a 20 square kilometer area just south of the Suez and which is under the control of Egypt's Ministry of Investment (G.A.F.I.); a zone whose importance is growing by the day, making Counselor Cao the key representative of Chinese commercial activities in this part of the African continent. This specific economic zone already houses many Chinese-Egyptian joint-ventures companies, and they are all based within a one square km area, which is called the China Economic and Trade Co-operation Zone – one of five that can be found across the continent. The formation of these co-operation zones was part of an eight-point economic and trade measures unveiled by the Chinese President before a historic gathering of 50 African heads of state in Beijing back in November 2006. In his address, President Hu Jintao described his country and Africa as “the cradles of human civilization and lands of great promise, brought together by common destiny and a common goal.” These objectives specifically targeted some of the least-developed nations and the first of these measures included the provision of aid in cash which Counselor Cao says is “better than any other form as it allows each individual country the freedom to do whatever they want.” In return, China will “advise” them on project ideas. In addition, these nations also receive help in the financing of loan from the Chinese government. Furthermore, the poorest countries have had their debts abolished, and imports tax to China removed. In Egypt's case, it does not qualify for any of the above. However, it does receive help in the transferral of technology from Chinese companies – a measure also enjoyed by the other participating countries in the scheme. Egypt is also qualified to seek a share of the $1 billion Sino-African fund, which is earmarked for Chinese corporations wishing to invest in Africa. This fund has a three-year cycle, which amounts to about $5 billion. The last of these eight measures covers the training of entrepreneurs in areas such as industry, education and agriculture. This initiative actually predated the Hu speech, but only really took off during 2008. Such trainings usually take place in China and they last for 25 days – comprising of two weeks of training at a major Chinese city, and also a one-week all-expenses-paid-for sight-seeing trip around the country. In 2009, 360 Egyptians qualified for this initiative. However, all of these names had been put forward by the Ministry of International Co-operation in Cairo, which indicates that it is not yet an open program – at least not for now. Moreover, these participants mainly work for the Egyptian government and Counselor Cao admits that it is difficult to gauge what wider impact they will have upon private businesses – the lifeline of any country – in the North African nation as a whole. Either way, Counselor Cao is convinced that the individuals who took part would have learned something new in their fields of expertise, and would possibly have changed their views on China, which he hopes would be “positive.” China's economy will no doubt benefit, too, he added. Indeed, Egypt now forms a vital part of China's international investment, totally just under $800 million in the last 10 years. As part of their strategy to expand further, one area they are focusing upon is the lucrative field of container ports. Chinese companies are actively establishing a presence in such places around the world, and the Suez is a prime example of how it might all look in the future. At present, Cosco – China's first-ever international shipping company – has a 20 percent share in Danish giant, Maersk's container port in Port Said. But that's only phase one of a 10-year plan. Since 2009, work has been underway to construct a second container port in eastern Port Said. It is being built by The Chinese Harbor State Company, and a similar one is currently under construction in the Sri Lankan port of Hambantota – costing $1 billion and will be used as a refueling and docking station for its navy and to channel Saudi oil. This latest project is set to cost about $220 million and is slated to finish in August 2011. Once it is ready for use, the container port will be shared between Cosco, Maersk, the Suez Canal Authority and the Ministry of Transportation. Crucially, it will allow Cosco to store their containers for free rather than having to pay the exorbitant prices charged elsewhere. This, Counselor Cao points out, will allow Cosco to establish a strong presence in Egypt, from where they can then send containers to Europe and beyond. Phase three comes further downstream at Ain Sukhna, where a similar project is earmarked for transporting goods to East Africa. Up north along the Mediterranean coast in Domyat, a container port is earmarked there for the future. These mega-constructions are naturally the headline-grabber, and could transform the Suez yet further, bringing in more money for both China and Egypt. Elsewhere on the African continent, Chinese businesses are also spending upwards of $40 million businesses investing in oil drilling and the mending of oil fields across the region, whilst small-scale investments include shoes and textiles (about $1-2 million), with plastics are also experiencing a boom. But for the ordinary man on the streets of Cairo or Luxor, it is Chinese tourism that will benefit them the most. Since 2008, roughly 120,000 have visited Egypt – a trend began in 2002 when Egypt became the first country on the continent to open up to Chinese tourists. Fourteen countries have since followed suit, and the land of the Nile and the pyramids is now the major destination for Chinese seeking more exotic destinations to go with their increased wealth, more freedom to travel and fewer visa restrictions. Much groundwork had been done by the Egyptian Tourist Office back in 2006 when it hosted a series of activities and exhibitions in Beijing promoting Egypt, even enlisting the help of Suzanne Mubarak. Back home, the Egyptian tourism authorities have begun publishing Chinese guide books and even providing Chinese lessons for many tour guides in preparation for the influx. Chinese tourists almost always travel to the Middle East or Africa in groups – likely a ten-day tour taking in Turkey, Syria/Jordan and Egypt, or Egypt coupled with a safari holiday in Kenya or even South Africa. The winter peak tourist season just happens to coincide with the long Chinese New Year break, and many predict that the 2010/2011 season could be the most lucrative yet as far as visitors' number from China is concerned. There is a still a long way to go, of course, to match Europe's popularity for people from mainland China but industry sources within China and in Egypt are more than hopeful for the future. The same cannot be said for Egyptians going to China, however. Barely a trickle of Egyptian tourists make it there – numbering about 5,000 per year – and the majority travel on business visas only. The Chinese Embassy in Cairo reports that applications from Egyptians are “very, very low” despite the simplicity in the procedure – three-day turnaround, 150 Egyptian pounds ($27) for a 30-day visa and a confirmation of a hotel voucher. Of those that do make it, some go to China to seek alternative medical treatments for their kidney, brain ailments and paralysis using Chinese and/or Western medicine. However, these applications are very rare and those who go usually hear it through word-of-mouth amongst the business community in Cairo. The reason for such low interest is simple: ordinary Egyptians simply cannot afford to go to China or, as Counselor Cao put it bluntly, “they have no interest in visiting our country – preferring to go to Europe instead.” This aside, it is clear that China's relationship with Egypt and other African countries is becoming stronger and more multifaceted. No surprises then such influence and involvement have also brought with them plenty of criticisms and accusations from many Western governments and the World Bank All concerning the morality of these investments. Outsiders regard these ‘unconditional' financial deals and partnerships as unfettered and uncompetitive (frequently by undercutting rival international bidders or local businesses). Crucially, they ignore problems such as human rights, political repression, electoral fraud as well as political and economic reform within these countries, many of them ruled by dictators. Whilst Counselor Cao does not deny that his country's investments have had no impacts upon local industries or other international rivals, critics need to see the wider picture before being drawn into any finger-pointing, “A lot of these projects are (Chinese) government-directed, but many smaller companies also invest in these countries without our government's interference,” he argued “For sure, many of these private investors come to us in Cairo for help, but my job is to give them the best advise and it is up to them whether they want to invest or not”, he added. Counselor Cao asserts that it is “impossible” that many Chinese investors are “economically blind,” motivated only by greed. He continued, “Think of it this way: if a country is politically stable, there should be an opportunity to invest, and the relationship between us and many African governments are very good.” He also rejects the criticisms made by the World Bank, and argued that many of these African countries actually appreciate Chinese investments – like road-building in Zambia or hi-tech industries in Nigeria – in a continent which has long been neglected by western investments due to perceived instability or fear. Morocco, for example, only recognized China's status of market economy in January of this year, even though bilateral trade between the two nations was valued at $1.86 billion for the first three quarters of 2009. As of now, China is Morocco's third most important source for material import. “Overall, investment in Africa is good because natural resources are plentiful and many of these countries don't have the money to explore. Our involvement brings in investments and jobs to Africa and Egypt, and many of these governments need us”, Counselor Cao concluded. He also points to China's prominent role in the international effort to stamp out maritime piracy at the Horn of Africa, and that China is merely filling in the gaps left void by the richer nations. However, it is not a rosy picture all round. The global economic crisis has hit many African nations very hard, and many – such as the Zambian government – simply cannot afford to provide funds for public works projects at the moment. As a result, private Chinese firms are either having to abandon constructions midway or to redeploy their officials to projects in unaffected places elsewhere. Some simply retreat back to China until the situation improves. Others, take an even bolder move by uprooting the entire business and family to start a new life in the continent to take advantage of the cheap labor. Meanwhile, locals see no improvements to their water supplies or road surfaces, and unemployment increases again. Egypt can only hope that the downturn in bilateral trade with China last year was a mere blip. So, as powerful as it might seem, China and its investors are, like everyone else, at the mercy of the rise and fall of capitalism. It is just ironic given those who are calling the shots in Beijing and elsewhere belong to the Politburo of the Chinese Communist Party. BM
