A 2006 Egyptian Theme Exhibition in Beijing is a sign of growing trade influence [GETTY]

The Silk Route once supported a busy trade environment with caravans carrying everything from gold, salt and spices, exotic fabrics and silks between China, the Middle East and Africa. 

Now, more than two centuries later, China is again expanding its economic and political ties across the Middle East and Africa, with the aim of securing energy resources and raw materials to fuel its burgeoning economy and find growing markets receptive to its exports and investment.

Egypt, considered a strategic gateway between Africa and the Middle East, is of particular interest to China, and the increasingly close ties between the two countries reflect the Asian giant's growing regional presence.

Mohamed Selim, former director of the Centre for Asian Studies at Cairo University, believes China's increased economic presence will positively impact Egyptian industry and markets.

"Chinese investment creates jobs and opportunities for the country's youth, brings Egypt closer to a rising global economic power, and diversifies our partners giving us more political leverage," he told Al Jazeera.

Chinese goods 
 

Traditional Ramadan lanterns are now among
the products China ships to Egypt [EPA]

In recent years, Egypt's markets have been flooded with Chinese manufactured goods, including cigarette lighters, traditional Ramadan lighting, footwear and automobiles.

"In just over a year, we have secured 17 per cent of the market share of 1.6 -2 litre cars," Sameh Sawires, the Egypt-based sales agent for Chinese car-maker Brilliance, told Al Jazeera.

"We expect a greater share in 2008. In October 2007, Rachid Mohamed Rachid, Egypt's Minister for Trade, signed a trade agreement with China to set up an industrial zone near the Suez Canal, where Chinese companies will manufacture electronics, gas and oil pipes, textiles and cars.

"In just over a year, we have secured 17 per cent of the market share of 1.6 -2 litre cars," Sameh Sawires, the Egypt-based sales agent for Chinese car-maker Brilliance, told Al Jazeera.

"We expect a greater share in 2008. In October 2007, Rachid Mohamed Rachid, Egypt's Minister for Trade, signed a trade agreement with China to set up an industrial zone near the Suez Canal, where Chinese companies will manufacture electronics, gas and oil pipes, textiles and cars.

The deal is expected to attract up to $2.5 billion in investment from Chinese companies, Egyptian local media reported.

There is even a Chinatown planned for construction on the outskirts of Cairo - complete with its own shops, hotels and worker accommodation - where hundreds of Chinese textile, furniture and IT companies will manufacture their products.

Economic partnerships

China's Wu Bangguo and Egyptian President
Hosni Mubarak meet in Cairo in May 2007 [EPA
]

Trade between China and Egypt grew at an average of 30 per cent a year between 2003 and 2006, according to figures provided by Egypt's Ministry of Trade and Industry.

But the burgeoning economic partnership is also quickly translating into political influence, with both countries already cooperating on a number of important issues.

"Trade is growing rapidly so bilateral ties in other areas are growing too," said a spokesman for the commercial office of the Chinese Embassy in Cairo told Al Jazeera.

In 2006, China agreed to assist with the development of Egypt's nuclear energy programme, which had been dormant since 1986, and which is a sensitive political issue in the region.

Egypt in turn reiterated its support for the One-China policy, which opposes the independence of Taiwan.

The exchange of culture and education between Egypt and China has also dramtically increased in recent years.

In 2006, several higher education institutions such as Cairo, Ain Shams and Suez Canal universities established Chinese language departments, while a Confucius Institute for Chinese language and culture in Cairo was launched in October 2007.

Waning US influence

While Rachid insists that the US "will continue to be a very important strategic and economic partner," some analysts believe the Asian giant will eventually overtake the US as the primary political influence in Egypt and the wider region.

They say that the strengthening trade ties would help China eventually replace the US as Egypt's second largest trading partner, after the EU.

Mohamed Farahat, a researcher at the Al-Ahram Centre for Political and Strategic Studies in Cairo, believes China's growing political influence in the area could provide a check on US authority in the Middle East and Africa.

"America is the main player in the region, but China will begin to balance its power in the coming years," Farahat said.

"It won't be difficult because the US has a very negative image in the Arab world, while China is viewed quite positively."

Beyond Egypt

Outside of Egypt, oil reserves remain China's main interest in the Middle East and Africa.

The country is expected to import about 70 per cent of its oil from the Middle East by 2015, according to the International Energy Agency, and as China's demand for energy skyrockets, its relations with Middle Eastern and African oil-producing states are also expected to grow.

"China wants to participate in making big decisions in the world," Zhai Jun, Chinese assistant minister of Foreign Affairs said in December 2006.

"We want to set up a mechanism to negotiate and discuss oil market issues with the OPEC countries."

In Africa, China has strengthened ties with many governments in its search for oil, offering major infrastructure developments and debt relief packages in countries like Sudan and Somalia in exchange for exploration and exploitation rights.

Chinese leaders are now more frequent visitors to African capitals, and Chinese direct investment in Africa climbed to over $50 billion in 2006 alone. More than 500,000 Chinese businessmen are now reported to have set up in Africa.

Reservations over China

But some human rights organisations have criticised China for what they called its collusion with oppressive governments.

They say China has not only funded but protected from Sudan international pressure using its diplomatic influence in the UN.

Andrew McGregor, a Canada-based security analyst, wrote in an August 2007 China brief for the Jamestown Foundation.: "What is also notable is that of the five African countries (Sudan, Niger, Nigeria, Ethiopia, and Angola) where China is involved in major resource operations, only one, Angola, is not dealing with a major insurgency."

There are also concerns that China will use countries like Egypt merely to increase its economic clout by exploiting the abundance of raw materials and cheap labour and flooding local markets with cheap goods.

Significantly, the trade balance between Egypt and China in 2006 was $2.2 billion in China's favour.

"Egyptians are unhappy with the quality of Chinese products," said Adel Beshai, professor of economics at the American University in Cairo.

"China may win in the short run because she knows that if she sends goods to the US or Europe she must abide by quality controls."

"But if [China] thinks [it] can go on indefinitely sending junk to developing countries she is mistaken."

Trade and oil

But Selim dismiss fears over China's role in the region.

He believes that China is preoccupied with its immediate neighbors like Japan, the Koreas and Taiwan, and domestic issues like growing poverty, mass internal migration and rising crime.

"China's interests in the Middle East and Africa are about two things only," says Selim. "Trade and oil."

Moreover, at this stage of its development, China is unwilling to make its presence felt in ways that might upset Western interests.

"Look at China's record at the UN Security Council – it never opposes any resolutions. Arab countries want to get China more involved (politically), but it is the Chinese who are reluctant."

"They don't want to step on any toes."

Source: Al Jazeera