China buckles in its belt and road ambitions with Suez investments
- Chinese companies are tapping into opportunities to set up industries with access to markets in the Middle East and Europe
- China is biggest user of Suez Canal, where more than 10 per cent of global trade passes every year
About 120km (75 miles) east of Cairo near the Suez Canal lies one of the biggest concentrations of Chinese investments in Egypt – part of the Belt and Road Initiative, President Xi Jinping’s trade and infrastructure development plan.
Most of the massive investments are concentrated in the Suez Canal Economic Zone, made up of six ports and four industrial estates, which has attracted many businesses making building materials, high-voltage equipment, machinery and petroleum equipment.
Within the zone, China has built a 7.34 sq km (3 sq miles) industrial estate known as Teda City, short for the China-Egypt Teda Suez Economic and Trade Cooperation Zone.
From their manufacturing hub at Teda, Chinese companies are tapping into the opportunities that come with the belt and road project, setting up industries to serve markets in the Middle East and Europe, through the Suez Canal.
More than 10 per cent of global trade – 18,000 ships every year – goes through the Suez Canal and China is its biggest user. The waterway connects the Mediterranean to the Red Sea and is the shortest sea link between Asia and Europe, Beijing’s biggest market.
The scale of the Suez Canal’s importance was underlined in March when Ever Given, a 200,000 deadweight-tonne ship carrying 20,000 containers, got stuck in the waterway on its way from China to Rotterdam.
The blockage, which lasted for six days, held up trade valued at more than US$9 billion per day, according to data from Lloyd’s List.
