Home / Business / Macro

China now biggest investor in Suez

Xinhua | Updated: 2017-03-23 07:56

Project head says relationship between two countries is a win-win proposition

SUEZ, Egypt-China has become the biggest investor in Egypt's Suez Canal Area Development Project, a mega initiative showcasing a win-win partnership between the two countries, said Ahmed Darwish, chairman of the Suez Canal Economic Zone, or SCZone, in an interview with Xinhua.

The aim of the giant project, launched in 2014, is to increase the role of the Suez Canal region in international trading and to develop the three canal cities of Suez, Ismailia and Port Said.

China's TEDA Group, one of the oldest industrial developers of the region, has seen a steady increase in the number of its development projects and factories since it entered Egypt and established a joint Suez Economic and Trade Cooperation Zone in the Ain Sokhna district of the Suez Canal Corridor east of capital Cairo.

"Currently, the Chinese investments are the largest. We highly appreciate the earnestness of our Chinese partners. They were among the first to act as an industrial developer in the zone," the SCZone chief said.

"TEDA has put in place the micro-infrastructure and is repurposing the land. They are doing an excellent job."

Darwish said the partnership was a win-win situation, because TEDA knew best how to promote the zone among Chinese investors, while Egypt's trade agreements with African states made it easy for Chinese products to enter African markets without trade barriers or customs.

"We are opening up 26 African countries for Chinese investors due to our trade agreements. When they have the 'Made in Egypt' label on their products, they go through zero trade barriers and zero customs," Darwish said, highlighting the zone's distinguished location that is only one hour away from Jeddah, Saudi Arabia, two hours from Djibouti and two-and-a-half hours from Mombasa, Kenya, by air.

The idea of an industrial zone in the Suez Canal Corridor-covering a total area of 461 square kilometers and comprising four sections and six ports-emerged in 1998 when laws were modified to facilitate the presence of foreign investors and to provide foreign companies with land usufruct rights (right to use the property of another for a period of time with the obligation to return it, or leave it, undamaged or unimpaired).

China's TEDA is working on the development of an area that increased to 7.23 sq km at Ain Sokhna. It has completed its first phase, attracting some 68 enterprises, including Jushi, a fiberglass giant from China. The second phase started in 2016.

Darwish stressed that Egypt was "a major player" in the Belt and Road Initiative.

"We are welcoming very much the Belt and Road Initiative," he said. "We are very happy that the Chinese are seeing us being among the bright spots for development and sustainability along the Belt and Road."

As for complaints by some companies that the Egyptian government raised the tax imposed on investors in industrial zones from 10 percent to 22.5 percent, Darwish said this did not apply to those established and operating in Egypt under the old law, like TEDA.

"Companies that started in the zone with a 10 percent tax remain in the zone with a 10 percent tax," he said.

"TEDA was established under the old law, but new tenants of TEDA that came after the new law is enacted will be subject to the 22.5 percent tax," he said.

Darwish said the investment law was still being reviewed and hopefully an attractive formula for investors would emerge.

He said a comparison of the SCZone with 17 other zones for industries worldwide showed that the Egyptian zone had a competitive advantage in specific areas such as the pharmaceutical, automotive and food and beverage industries.

"Initially, I have been doing general promotion of the zone, meeting with associations of businessmen in China, France, the United States, Japan, South Korea and others," Darwish said.

"But now I am more focused on targeting certain companies and trying to attract leading investors to the zone to build clusters of specific industries."

Most Viewed in 24 Hours
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349