Egypt’s New Capital: How China Expands Its Influence

  • Egypt is building a new capital east of Cairo, especially with financial support from China.
  • Beijing’s involvement, however, is not altruistic, and China has been pursuing several goals in the region for some time.
  • China expert Moritz Rudolf explains why Beijing is involved in this prestigious project and what it wants to gain from it.

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It is already a city of superlatives: it will be the seat of the tallest parliament building in the Middle East, the tallest skyscraper in Africa and the tallest flagpole in the world – Egypt is building a new capital for its government and administration.

The infrastructure project, costing a total of almost EUR 50 billion, is expected to boost Egypt’s economy, relieve the current capital of Cairo, with a population of almost 6 million, and make the country more modern. So much for Egyptian goals.

China is financing a great building

Since not only President Abdel Fattah al-Sisi pursues his interests east of Cairo, China is also promoting its influence in the Middle East. Beijing is largely financing its new capital and plans to invest around € 9.3 billion by 2027.

The Chinese company CSCEC is responsible for the prestigious “Iconic Tower” building, a 385-meter-high skyscraper. The world’s largest construction company sent hundreds of Chinese workers to Egypt. The heart of the new city, a $ 3 billion business district, is largely financed by China and built in record time.

Building a China-oriented network

Al-Sisi speaks of the “birth of a new state”. It is also the birth of Egypt with closer ties than ever with Beijing. “Egypt is a key and hinge country for China in the region with a view to Africa and the Arab world,” says Moritz Rudolf of Yale Law School with certainty. Egypt is a very important partner – economic, political and strategic.

“In addition to the economic interests of the state-owned companies involved, China hopes to be seen as a good and reliable partner,” says Rudolf. China is betting that news is circulating about its commitment to positive pilot projects in the region. “In the medium to long term, a new network around China could emerge,” explains Rudolf.

Not the only activity

No wonder that the construction of the capital is not the only activity of Beijing in the region: Chinese state-owned companies are also involved in the construction of infrastructure, for example Exim Bank of China is financing a USD 1.2 billion railway route between Cairo and the new capital. China is also the largest investor in the expansion of the Suez Canal, also as part of the al-Sisi modernization program.

“China was also active in Egypt in the vaccination campaign, collaborating to build a vaccine production center,” remembers Rudolf. China has been able to spread the narrative that the African state has experienced technology transfer. “An important symbol at the level of soft power” – assesses the expert.

Massive investments in the region

Since 2014, the time when al-Sisi came to power, China has significantly increased its investments. According to a study by the Africa Center at Johns Hopkins University, Egypt received nearly $ 5 billion in Chinese funding between 2015 and 2019, compared to just $ 280 million in the last 12 years.

“Projects like this are making it easier for Beijing to open up the African market and invest,” says Rudolf. Transport routes in the Middle East under the “New Silk Road” are also of strategic importance for China in terms of exports to Europe. “Moreover, China naturally wants to secure its own energy supply,” says Rudolf. The region accounts for half of China’s ten largest crude oil suppliers.

security themes

Observers also assume that China is driven by security policy motives. In 2016, Beijing established the first foreign military base in Djibouti. “China knows it cannot win against Europe, but African countries are orientated towards both the West and China – there is something to gain here,” says Rudolf.

China is trying to strategically serve the interests of these countries. “Often it is about infrastructure projects that the West would not dare to undertake,” he notes. However, these are not “new port” deal versus “UN Human Rights Council voting” deals.

spokesman for developing countries

“Common interests and interpretations have grown for decades, Cairo and Beijing have been close for a long time,” says Rudolf. In any case, China and Africa have a similar view on human rights issues. In developing countries, the focus is not traditionally on individual human rights, but rather on economic, social and cultural rights, such as those related to development or health.

“China is the spokesman for other developing countries here. This approach is cemented by their growing political influence, ”explains Rudolf. However, the expert believes that the association of involvement in Egypt as development financing is a misinterpretation.

Collaboration at eye level

“Egypt is not only part of the African strategy where Beijing is increasing its political influence,” he says. The strategy describes the development as more and more African countries are turning to China for money and investment.

“For China, Egypt is both Arab and African. In the Middle East, China is also massively expanding relations with Iran, Israel and Saudi Arabia – on an equal footing, ”says Rudolf. This applies, for example, to technological cooperation and the financial industry.

“There are many examples of Chinese involvement in the region: China has supported the construction of a large mosque in Algeria, helped finance railways in Ethiopia, and built technology parks in Saudi Arabia,” says Rudolf.

It is also said that there is an agreement in principle with Iran that should bring in Chinese investment of $ 400 billion over the next 25 years. Whatever form of quid pro quo Beijing expects, its influence is growing.

About the expert:

Dr. Moritz Rudolph is a Paul Tsai China Center scholarship holder at Yale Law School and conducts research into the growing influence of China in the international legal order. Rudolf studied law, economics and Chinese in Berlin, Heidelberg and Beijing.

Sources used:

  • Wirtschaftswoche.de: Egypt is building a new capital here in record time – with strong support from China. 05/08/2021

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