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Economic Environment

  In June 2014, Sisi was elected to be the President. He ended the political volatility of Egypt and the political situation trended to be stable. In aspect of economy, Egypt proposed ambitious development blueprint and acquired a lot of financial support from the Arab countries of the Gulf. The economic situation of Egypt is improved markedly.

  In March 2015, Egypt government issued New Law on Investment, which proposed multiple measures including “One-Stop Service” in order to improve the investment environment and attract more foreign investment. With its special investment environment, Egypt has attracted more and more Chinese enterprises to choose it as the undertaking place for their industrial transfer.

  (1) Unique location advantages. Egypt stretches over Asia and Africa and faces to Europe to the north on the other side of the Mediterranean. And in the southwest, it can connect directly with the backland of Africa. Suez Canal is the shipping lifeline for connecting Europe and Asia and its strategic position is extremely important. Egypt has maritime transportation and air transportation connecting to countries in Asia and Africa as well as land transportation network connecting to Africa. It has convenient transportation and excellent geographical location.

  (2) Abundant human resource and domestic market full of potentiality. Egypt is a country with large population in the Middle East. The labor resource is abundant. In the Middle East and regions on the Mediterranean coast, Egypt’s salary level of labor is relatively competitive. In addition, Egypt has a large quantity of educated technical talents and highly educated population. The resident consumption structure of Egypt is gradually developing from the stage of basic living consumption to the stage of convenient living consumption. And some of them has achieve the stage of enjoying living consumption.

  (3) Abundant natural resource. Egypt has a lot of undeveloped land, with low price. And Egypt also has resources of petroleum and natural gas as well as mineral resources such as phosphate, iron ore, marble, limestone and etc.

  (4) Facilitating terms of international trade. Egypt accessed to the WTO in 1995 and actively participated in various kinds of multi-lateral and bilateral trade agreements. Currently, Egypt has participated in regional trade agreements such as Egypt-EU Partnership Agreement, Agreements of The Greater Arab Free Trade Area, Agreements of Qualifying Industrial Zones, Common Market for Eastern and Southern Africa, Agreement on Egypt- Turkey Free Trade Zone.

  In June 2015, the three great influential regional integration organizations in Africa, i.e. East Africa Community, Common Market for Eastern and Southern Africa and Southern African Development Community, signed the agreement on the summit meeting held in Sharm el Sheikh and decided to establish uniform market. The final target is to establish African Continent Free Trade Zone in 2017. It has made the historical step in integration of African region. New uniform market covers 26 countries of Africa Continent, with the population of 625 million. And the Gross National Product achieved USD 1200 billion, accounting for 58% of the whole Africa. In August 2015, the cabinet of Egypt decided to establish International Trade Formalities Facilitation Commission. Establishment of the commission aims at simplifying the formalities for import and export. The first stage of implementation of the resolutions of the commission has been carried out in Alexander Port. This port will gather relevant authorities such as Import and Export Supervision Bureau and Port Administration together to provide one-stop service. This mode will relieve the current cargo accumulation problem caused by the long time spent on clearance formalities.

  (5)Relevant complete infrastructure. Although some infrastructure of Egypt are outmoded, it is still relevant complete in Asia. Egypt has 64,000km of highway, which can basically connect to most cities, towns and rural areas in the whole country. Egypt has 10 International airports. Cairo Airport is the second largest airport in Africa. Egypt is an international commerce and shipping center. With 15 commercial ports, the annual cargo handling capacity is 234,450,000 ton. In

  addition, Egypt has the installed power-generating capacity of 30,000 megawatt. Its power generation capacity took the first place in Africa and Middle East.

  Both China and Egypt are developing countries. Currently, they face to similar challenges in aspect of reform, stability and development. “The Belt and Road” proposal is highly consistent with development strategies of Egypt such as development of Suez Canal Corridor. There is huge potentiality of cooperation between China and Egypt in aspects of energy, infrastructure construction and etc. In long term, it is hopeful for investment and cooperation between China and Egypt to enter a new development period:

  (1) Egypt is an important economic and trade cooperative partnership of China in West Asia and North Africa region. Regardless of changes of the situation, Egypt’s large population and special geographical location decide that, Egypt will be an import market for China in West Asia and North Africa. It can also provide support for China to expand the market in West Asia, North Africa and Europe.

  (2) The political situation of Egypt will keeps stable and Egypt’s economy will grow continuously. Although terrorist attack and defective economic structure bring continuous adverse influence on political and economic stability of Egypt, it is not subversive. However the situation changes, Egypt’s determination for attracting foreign investment won’t change. In fact, in the three years when the situation is most turbulent, the production and operation of Chinese enterprises in Egypt were not influenced greatly. Currently, the investment environment of Egypt is still better than most African countries. And its public security environment and infrastructure are also better than most of the African countries.

  (3)The progress of economic system reform of Egypt will also improve the policy environment for making use of foreign investment gradually. The severe domestic economic trend propels Egypt to seek for support of foreign investment and foreign aid. Under the effect and internal and external force, Egypt’s economic reform will gradually improve its investment environment.

  

 
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