Beyond trade and investment, China and Egypt have expanded cooperation into new sectors, including technology, artificial intelligence, and defense. In 2024, joint naval exercises in the Mediterranean, discussions on arms procurement, and increased military exchanges signaled a shift toward deeper security engagement.
The two countries are strengthening ties in the areas of digital infrastructure, artificial intelligence, fintech and space technology. Huawei and ZTE are leading the African country's digital transformation, while China is supporting Egypt's satellite development and remote sensing capabilities.
In recent years, Egyptian President Sisi has fostered closer ties with China, including through the launch of infrastructure and energy projects under President Xi Jinping's Belt and Road Initiative.
The partnership is expected to expand beyond infrastructure into green energy and deeper financial collaboration, with Egypt exploring yuan-denominated bonds and China increasing its role in Egypt’s industrialisation.
Despite strong ties, Egypt’s investment climate presents hurdles such as regulatory barriers and trade imbalances, with concerns over Chinese surplus goods and industrial emissions.
China and Egypt have long-standing diplomatic ties, with Egypt becoming the first African, Middle Eastern, and Arab nation to establish official relations with China in 1956. Over the past decade, this relationship has evolved into a dynamic economic and strategic partnership, culminating in what has been referred to as the “golden decade” of China-Egypt relations. The beginning of 2025 marked the conclusion of the Year of the Egyptian-Chinese Partnership, a milestone underscoring the growing breadth of cooperation between the two nations.
In November 2006, Egypt announced that it would grant China full market economy status. In recent years, the two governments have actively encouraged and promoted enterprises on both sides to expand economic and trade cooperation, and bilateral trade has continued to develop. In 2013, the trade volume between China and Egypt exceeded US$10 billion for the first time, reaching US$10.213 billion. In 2023, the bilateral trade volume will be US$15.81 billion. From January to June 2024, the bilateral trade volume was US$8.32 billion.
Since 2014, under the leadership of Chinese President Xi Jinping and Egyptian President Abdel Fattah el-Sisi, the two countries have deepened their comprehensive strategic partnership. Egypt has become a key hub for Chinese investment in the Middle East and North Africa (MENA), playing a vital role in Beijing’s Belt and Road Initiative (BRI). The Suez Canal Economic Zone (SCZone) has emerged as a focal point of Chinese economic activity, with investments exceeding US$3 billion and accounting for 40 percent of foreign direct investment in the past two years, according to official data. Chinese companies have signed multi-billion-dollar agreements in infrastructure, energy, and technology, reinforcing Egypt’s role as a gateway to African and European markets.
Last October, during his meeting with Chinese President Xi Jinping on the sidelines of the BRICS summit in Kazan, Russia, President Abdel Fattah El-Sisi said that “Egypt looks forward to continuing fruitful cooperation with China in the areas of manufacturing and technology transfer.” Al-Sisi praised China's participation in many important economic projects in Egypt, particularly in the areas of infrastructure, transportation and railways.
Defense cooperation
Beyond trade and investment, China and Egypt have expanded cooperation into new sectors, including technology, artificial intelligence, and defense. In 2024, joint naval exercises in the Mediterranean, discussions on arms procurement, and increased military exchanges signaled a shift toward deeper security engagement—albeit from a low starting point. While rumors of Egypt purchasing Chinese J-10C fighter jets remain unconfirmed, they reflect Cairo’s broader strategy of diversifying its defense partnerships.
China and Egypt have increased their collaboration in regional port interconnection in addition to continuing the SETCZ’s construction. Sisi was present for the MoU signing between the Chinese company, Hutchison Ports, and the Egyptian Naval Forces in August 2019 to develop a container handling terminal in Abu Qir Port. Alexandria and El Dekheila, Egypt’s two principal commercial ports, are already run by Hutchison Ports.
In 2020, Hutchison Ports has signed an agreement with the Egyptian Navy to develop a $730m, 2m teu container terminal at Abu Qir peninsula close to Alexandria.
Egypt, a major recipient of U.S. military aid, is not the only country in Africa being drawn into China’s orbit. Beijing has 23 bilateral space partnerships in Africa, including funding for satellites and ground stations to collect satellite imagery and data, according to the United States Institute of Peace, a think tank. In the past year, Egypt, South Africa and Senegal agreed to collaborate with China on a future moon base, a project that rivals the United States’ own lunar plans.
The Pentagon says China’s space projects in Africa and other parts of the developing world are a security risk because Beijing can hoover up sensitive data, enhance its military capabilities and coerce governments if they become locked into China’s communications ecosystem.
The space infrastructure and equipment that China is installing in Africa have common civilian uses such as transmitting data, monitoring the impact of climate change and helping fly spacecraft. But they also have military applications.
Powerful telescopes are used for space situational awareness. They could predict when U.S. military satellites pass overhead and help coordinate the use of anti-satellite weapons (ASAT), according to a 2022 report by the U.S. Defense Intelligence Agency. During a conflict, for instance if China invaded democratically ruled Taiwan, knocking out an enemy’s satellites could disrupt missile guidance systems and tangle communications between ground, air and naval troops. China and Russia have previously tested ASATs and are continuing to develop more advanced versions, the DIA report said.
China projects its power overseas using a network of commercial ports and dual-use facilities that provide logistics and intelligence support to the Chinese navy. By 2022, Chinese companies owned or operated terminals in 96 ports in 53 countries, and in at least nine ports, two of which are in Europe, significant repair or maintenance operations were carried out for vessels and equipment on PLA warships. In addition, visits by Chinese naval vessels reveal areas of influence, priority areas of operation, intelligence-gathering targets and cooperation priorities. All major investments in seaports, railways, and airports, therefore, offer Beijing the opportunity to monitor and control activities at crucial logistics nodes with a key strategic dimension.
In September 2024, Chinese Air Force planes participated in the Air Show in Egypt. On Aug. 19, 2024, the destroyer Jiaozuo (Hull 163) and the supply ship Honghu (Hull 906), belonging to China's 46th naval escort taskforce, arrived in the port of Alexandria, Egypt, for a five-day visit.  |
Cooperation in digital economy
Beyond traditional industries, the digital economy has become a key area of engagement between the two countries. With the rise of smart city initiatives and digital transformation, Chinese tech firms such as Huawei and ZTE have expanded their involvement in Egypt’s telecommunications sector. These companies are not only helping roll out 5G infrastructure but are also collaborating on AI-driven smart governance solutions.
In particular, a significant area of expansion is the Digital BRI, where China and Egypt have intensified cooperation in telecommunications, AI and fintech. As mentioned, Chinese companies such as Huawei and ZTE are playing a key role in Egypt's digital transformation, from launching 5G infrastructure to supporting smart governance and e-commerce development. The Egyptian Information Technology Industry Development Agency (ITIDA) has partnered with Huawei to provide AI and cloud computing training to Egyptian companies, particularly in the areas of gaming, data management and cybersecurity. This reflects a broader push to integrate China's technology expertise into Egypt's emerging digital economy.
Additionally, the fintech sector has seen increased Chinese interest, with digital payment platforms and AI-driven financial services entering the Egyptian market as part of broader efforts to promote cashless transactions and e-government initiatives.
Bilateral cooperation in space technology
China is actively supporting Egypt’s ambitions to develop its space capabilities, particularly in satellite production, remote sensing, and telemetry tracking. The partnership between Egypt’s National Remote Sensing Space Science Bureau and China’s National Space Administration has enhanced data-sharing efforts for applications such as resource exploration, environmental monitoring, and crop yield estimation. This aligns with Egypt’s goal of leveraging space-based technologies for national development and security.
According to Reuters, the Egyptian satellite lab is the latest advance in China's secret space program abroad. Beijing, in fact, is building space alliances in Africa to boost its global surveillance network and further its bid to become the world's dominant space power, Reuters said. “China has publicly announced much of this space assistance to African countries, including its donations of satellites, space monitoring telescopes and ground stations. What it has not talked about openly, and what Reuters is reporting for the first time, is that Beijing has access to the data and images collected by this space technology and that Chinese personnel maintain a long-term presence at the facilities it builds in Africa.”
The satellite facility, which is enyrated for operation in 2023, is part of a series of space technologies that China has gifted to Egypt over the past two years. The transfers that have been made public include a new space monitoring center, which has two of the world's most powerful telescopes, as well as two Earth observation satellites launched in 2023-one assembled in Egypt and another produced exclusively in China. In addition, in the same year China launched a third Chinese-made satellite for Egypt, capable of military-grade surveillance, Reuters says.
The satellite facility is the centerpiece of Space City, a complex being constructed about 30 kilometers east of Cairo near a new administrative capital being built by Egyptian President Abdel Fattah El-Sisi’s government.
Infrastructure and transportation
China has played a crucial role in Egypt’s ambitious infrastructure projects, particularly in the construction of the New Administrative Capital (NAC). The Central Business District, home to Africa’s tallest skyscraper, is a flagship project undertaken by China State Construction Engineering Corporation (CSCEC), symbolising the depth of China’s involvement in Egypt’s urban expansion.
Beyond real estate, Chinese firms are investing in Egypt’s transport networks, contributing to the electrification of railway systems and the expansion of metro lines. The development of the high-speed rail network, aimed at connecting key industrial and commercial hubs, has also attracted Chinese expertise and financing. Additionally, Egypt’s strategic location along major maritime trade routes has made its ports an attractive investment destination. The modernisation of Ain Sokhna port, a key gateway under the BRI framework, reflects China’s efforts to enhance Egypt’s role as a regional logistics centre.
Renewable energy and green hydrogen
Renewable energy has emerged as another pillar of cooperation, particularly as Egypt accelerates its transition towards a more sustainable energy mix. China’s involvement in the Benban Solar Park, one of the world’s largest solar energy projects, has strengthened Egypt’s position as a leader in renewable energy in Africa.
Chinese firms have also entered Egypt’s green hydrogen sector, with several agreements signed to develop production facilities in the Suez Canal Economic Zone (SCZone). As demand for green energy solutions grows, Chinese companies are expected to play a key role in Egypt’s efforts to become a major hydrogen exporter to Europe and other markets.
Industrial collaboration and special economic zones
Industrial cooperation between the two countries has deepened, with Chinese firms expanding their presence in Egypt’s special economic zones. The Tianjin TEDA Suez Economic Zone has become a focal point of investment, attracting over 150 Chinese manufacturers in industries such as textiles, construction materials, electronics, and automotive components.
Egypt’s preferential trade agreements with Africa and Europe make it an attractive manufacturing base for Chinese firms looking to access new markets. The automotive industry, in particular, has gained momentum, with Chinese electric vehicle (EV) manufacturers like BYD and Chery investing in local assembly plants. While Egypt aims to develop a domestic EV ecosystem, including battery production and charging infrastructure, Chinese automakers are well-positioned to support this transition.
Outlook for 2025
Despite these challenges, the momentum behind China-Egypt relations remains strong. China has supported Egypt’s efforts in global diplomacy, including preparations for hosting the UN Climate Change Conference in Sharm el-Sheikh. Moreover, Chinese investments in Egypt’s industrial sector, such as the Haier Group’s new home appliance manufacturing complex, indicate a growing commitment to local production and job creation. Meanwhile, Egypt is exploring new financial instruments to deepen its financial integration with China, including the potential issuance of bonds denominated in Chinese yuan.
Looking ahead, some analysts predict that the strategic partnership between China and Egypt will evolve beyond infrastructure and trade to high-tech cooperation, green energy, and regional economic integration. "As Egypt seeks to modernize its economy and attract additional foreign direct investment, China will remain a key player in its industrial and technological transformation. The outlook for investors in both countries remains optimistic, provided regulatory frameworks continue to improve and economic ties are managed with long-term sustainability in mind."
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