Egypt China's Economy

1.(SBU) Key points: -Despite recent growth in bilateral trade and pledges to increase investment, China's economic relations with Egypt remain fairly modest. -Chinese investment in Egypt is notfocused solely on profits, but rather on building and maintaining a Chinese presence in Egypt and Africa. Chinese Economic Ties with Egypt are Growing, But...
2.(SBU) On January 13, EconOffs met with CaoJiaching, the Commercial Minister-Counselor at the Chinese Embassy in Cairo. Jiachang characterized Chinese-Egyptian economic relations as "very good," and noted that Chinese trade and investment tieswith Egypt have grown steadily since 2004. Jiaching said that bilateral trade amounted to $5.5 billion in 2009, with the balance of trade heavily skewed towards Chinese exports. He added that Chineseinvestment has reached $500 million in Egypt, and said that China's goal is to double its investment to $1 billion by the end of 2012. (NOTE: The GOE's Minister of Investment recently stated that theamount of current Chinese investment is closer to $300 million).
3.(U) Chinese-Egyptian economic cooperation was on full display in November 2009, during the China-Africa Summit in Sharm El-Sheikh.Egyptian Prime Minister Ahmed Nazif and his Chinese counterpart signed 4 MOU's on improving trade, investment, customs, and cultural ties, and Egyptian Minister of Finance Mahmoud Mohiedden announcedthe opening of the first Chinese bank in Egypt (refs. A and B). The two countries also celebrated the nascent Chinese-Egyptian economic zone in Ain Sokhna, one of six special Chinese economic zones inAfrica whereby land has been set aside for Chinese companies to build factories and infrastructure. Jiachang told us that the Chinese zone in Ain Sokhna does not enjoy duty-free privileges likedesignated free zones in Egypt, but that the Chinese government provides special incentives for companies to invest in it. Overall Chinese Investment is Modest
4.(SBU) While Chinese investment is...