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Why China-Egypt Bilateral Trade and Investment Outlook Looks Bright – China Briefing

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China and Egypt enjoy a strategic partnership and have stepped up their economic cooperation. Egypt opens the door for Chinese investments and trade with the Middle East and North Africa (MENA). China’s Belt and Road Initiative (BRI) also aligns with Egypt’s national development plan for 2030. China is also Egypt’s main import partner (US$13.3 billion as of 2022). The two countries will soon focus on cooperation in strategic industries such as AI, space technology, and e-commerce. 


China-Egypt relations 

China and Egypt, among the world’s most ancient civilizations, have had friendly relations for a long time. At the pivotal 1955 Afro-Asian Bandung Conference in Indonesia, the former Chinese premier Zhou Enlai and Egyptian president Gamal Abdul Nasser established the foundation for contemporary Sino-Egyptian relations. Since then, Egypt has increasingly gained relevance in the Chinese government’s Middle Eastern strategy and is seen as a key force with strategic importance in the Arab world, Africa, and developing countries. 

Egypt was the first nation from Africa, the Middle East, or the Arab world to forge official diplomatic ties with China in 1956. Since 1956, Sino-Egyptian relations have gone through ups and downs, but there haven’t been any significant conflicts or outright wars. Egypt and China carried on a close ‘anti-imperialist revolutionary relationship’ between 1956 and 1976, promoting decolonization and self-determination throughout the third world. The two countries united similar views in opposition to hegemony, colonialism, and imperialism and pioneered assistance. 

Ties between the two countries substantially strengthened when Hosni Mubarak became president of Egypt in 1981, and in 1983, he visited China for the first time since being elected. Egypt invited the Chinese foreign minister Qian Qichen to visit Egypt in September 1989. The Sino-Egyptian relationship has since been strengthened in cooperation: the two countries created a ‘strategic partnership’ in 1999. After the 2011 uprising against former president Mubarak, the two countries continued to maintain strong ties, upgrading their relationship to a ‘comprehensive strategic partnership’ in December 2014 – signed between Chinese President Xi Jinping and Egyptian president Abdel Fattah el-Sisi. 

China-Egypt economic ties 

The development plans carried out under Sisi’s and Xi’s governments, known respectively as the Belt and Road Initiative (BRI) and Egypt Vision 2030, mutually reinforce and support one another. On the one hand, given its geographic location and economic potential, Egypt is in a unique position to assist China in advancing the BRI throughout the Middle East. On the other hand, the expansion of the Suez Canal for maritime and inland transportation is given top priority in the Sisi administration’s Egypt Vision 2030, which entered its implementation phase in February 2016 and aligns with the BRI’s goals in the region.  

The Sisi administration has also worked to strengthen its economic ties with China to advance Egypt’s industrialization. Considering this, China and Egypt also established deeper financial ties. Many Egyptian-funded banks, as well as Egyptian-foreign equity joint banks, offer Renminbi (RMB) and Egyptian Pound (EGP) exchange services as of 2022, and their ATMs recognize UnionPay cards. As Egypt needed to stabilize the EGP, the People’s Bank of China (PBOC) and the Central Bank of Egypt (CBE) signed an agreement in 2016 on an RMB18 billion (US$2.6 billion) local currency swap over the next three years. The China Development Bank (CDB) also provided loans of US$1.4 billion to Egyptian financial institutions that year, of which US$900 million went to the Central Bank of Egypt. 

Egypt is the first Middle Eastern nation to get financial assistance from the Asian Infrastructure Investment Bank (AIIB). Up to US$210 million in loan funding was announced by the AIIB in September 2017 to assist the construction of 11 solar power projects in Egypt. It is precisely through the work of development financial organizations like the China-Africa Development Fund (CAD Fund), the Silk Road Fund, and the AIIB, that China has contributed to and funded significant Egyptian projects. 

China-Egypt bilateral investment 

Chinese investment in Egypt has dramatically increased during the past 10 years. In 2017, China rose to become the sixth-largest investor in Egypt. A Report from the Arab Investment and Export Credit Guarantee Corporation states that between 2013 and 2019, China invested US$28.5 billion in the Arab region and created 23,930 jobs, making Egypt the recipient of the most jobs overall – most of them created by China.  

More than 140 Chinese businesses have made investments in Egypt. Chinese investment in Egypt has been mostly focused on industrial projects (55 percent), construction (20 percent), and services (12 percent).  

Egypt is now the third-biggest producer of fiberglass in the world thanks to the Suez Economic and Trade Cooperation Zone (SETCZ), which is by far the largest Chinese manufacturing initiative in Egypt in terms of investment volume. By the end of 2018, SETCZ had drawn over US$1 billion in investment, primarily from Chinese businesses, and contributed to the creation of more than 3000 employment for locals.  

The Central Business District (CBD) project in the new administrative capital city is among major infrastructure projects in Egypt’s construction, energy, transport, commerce, and industrial sectors where China has played a significant role. Since March 2018, the China State Construction Engineering Company (CSCEC) has been working on the CBD and it is by far the biggest infrastructure undertaking in Egypt. In particular, the CSCEC is responsible for finishing the construction of a zone of towers in the new administrative capital, including a 345-meter tower that may eventually set a record for height in Africa. 

China and Egypt have increased their collaboration in regional port interconnection in addition to continuing the SETCZ’s construction. Sisi was present for the MoU signing between the Chinese company, Hutchison Ports, and the Egyptian Naval Forces in August 2019 to develop a container handling terminal in Abu Qir Port. Alexandria and El Dekheila, Egypt’s two principal commercial ports, are already run by Hutchison Ports.  

China-Egypt bilateral trade 

Trade between China and Egypt runs in favor of China. Over the past 25 years, China’s exports to Egypt have expanded at an annual rate of 14.4 percent, reaching US$13.3 billion in 2020. On the other hand, Egypt’s exports to China have grown at an average rate of 17.9 percent over the same period, reaching US$754 million in 2020. 

The Sisi government has heartily embraced and even emulated the China model. As a result, the Sino-Egyptian economic collaboration has flourished, and China has continuously been Egypt’s top commercial partner during the Xi-Sisi era, becoming Egypt’s biggest importer.  

China exported US$13.3 billion in goods value to Egypt in 2020, with broadcasting equipment (US$751 million), non-retail synthetic filament yarn (US$379 million), and LCDs (US$371 million) figuring among the top products.  

Egypt, on its end, sold US$754 million worth of goods to China in 2020. Major export items included crude oil (US$255 million), refined oil (US$132 million), and citrus ($75.5 million).   

Future prospects 

Bilateral cooperation between China and Egypt is expanding to new frontiers, such as the so-called ‘Digital BRI’. To further advance their level of bilateral cooperation and realize benefits for both parties in space technology, the two countries have also decided to intensify their cooperation in satellite development, satellite launch, telemetry tracking & command (TT&C), satellite application, and data sharing. China supports Egypt’s plans to build its space capability and produce remote sensing and communication satellites. The agreement between Egypt’s National Remote Sensing Space Science Bureau and China’s National Space Administration further strengthened the sharing of satellite monitoring data in resource exploration, environmental monitoring, crop yield estimation, and other areas, raising the level of space cooperation between the two countries. 

Some considerations, however, are still required. First, Egypt’s economic performance falls short of China’s expectations, despite their successful economic collaboration. Egypt welcomes Chinese investment as it seeks Beijing’s assistance to modernize and industrialize. Yet Egypt also relies on other players, such as financing from Saudi Arabia and the United Arab Emirates, and  offered Russia a US$20 billion deal for civil nuclear power reactors. One of the most widespread concerns about the trade imbalance with China is that Egypt could suffer from Chinese surplus goods or the transfer of certain highly polluting industrial capacity.  

Egypt’s commercial environment, on the other hand, presents several difficulties for Chinese companies. The main challenges for Chinese businesses in Egypt include access to capital, customs and trade control, business registration and licenses, and land. At the same time, while focusing less on security issues, China seems to be now solely targeting economic cooperation with Egypt.   

Indeed, there are several indicators of the strengthening partnership between the two countries. Reportedly, China is assisting Egypt in getting ready to hold a UN climate change conference in the Red Sea city of Sharm el-Sheikh, while the General Authority for Investment and Free Zones in Egypt co-signed an agreement with the Chinese firm Haier Group Corporation for the construction of an industrial complex for the manufacture of home appliances. Egypt’s Information Technology Industry Development Agency and Chinese tech giant Huawei have closed a deal to collaborate in selecting Egyptian businesses that will receive technical help, cloud, and artificial intelligence technology training from Huawei – primarily targeting businesses in sectors such as AI, data management, gaming, and e-commerce. Meanwhile, Egypt is now working to offer bonds at Chinese yuan exchange rates. All things considered, bilateral commercial and economic engagement is strong, and prospects for investors look optimistic.   


About Us

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.

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How to Start Investing With Little Money – Yahoo Canada Finance

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Written by Tony Dong at The Motley Fool Canada

Successful investing involves holding a diversified portfolio of stocks, staying the course, and making consistent contributions. All of this helps take advantage of compound interest, which Albert Einstein described as “the eighth wonder of the world.”

Still, for investors starting out with less money (think $1,000ish), investing can be daunting. Some stocks have high share prices that can be a barrier to entry for new investors. Trying to buy enough shares of different companies to stay diversified can be difficult.

This can be discouraging, but fear not! There is a solution if you’re strapped for cash. With this alternative, even the smallest of investment portfolios can grow strongly.

ETFs are the solution

Thanks to exchange-traded funds (ETFs), investors no longer need vast sums of money to buy dozens of individual stocks. ETFs can hold a basket of up to thousands of various stocks. Some ETFs are basically all-in-one stock portfolios that are managed on your behalf by a professional. They trade on exchanges like any other stock with their own ticker symbol.

This approach is capital efficient. For instance, an ETF might trade at a price of $20 per share yet hold over 1,000 stocks in it. With your $1,000, you can now buy 50 shares of that ETF and gain proportional exposure to all of its underlying companies. This way, you become diversified without needing to buy 1,000 different stocks!

Index ETFs are ideal

ETFs do have a cost, though — the management expense ratio (MER). This is a percentage fee deducted from your investment on an annual basis. For example, an ETF that charges a 0.05% MER would cost an annual fee of 0.05 * $1,000 = $5 on your $1,000 investment.

Keeping this as low as possible is ideal. In general, the ETFs with the lowest MERs are index funds. These are passively managed investments that track an existing stock market index, like the S&P 500. With index funds, fees are low since the fund manager isn’t actively trying to pick stocks, so fund turnover remains at a minimum.

I like the S&P/TSX 60 Index. This index tracks 60 blue-chip, large-cap stocks listed on the TSX. Buying the S&P/TSX 60 is a great way to track the long-term performance of the Canadian stock market while gaining access to a portfolio of dividend stocks.

Why the S&P/TSX 60?

From 2000 to date, the S&P/TSX 60 has returned a compound average growth rate (CAGR) of 6.59% with dividends reinvested. This is a respectable return that could turn your initial $1,000 deposit into six-figures over two decades with modest contributions. Let’s use a real-life example to see this in action.

Imagine you started investing in 2000 as a broke 18-year-old student with just $1,000 to your name. You invest it all in an index fund tracking the S&P/TSX 60. Every month thereafter, you scrounge up $100 and invest it promptly in a disciplined and consistent manner.

After holding the ETF for 22 years, consistently putting in $100 every month, reinvesting all dividends, and never panic selling during crashes (even through the Dot-Com Bubble and the 2008 Great Financial Crisis), you would end up with $126,353.

If you started with more than $1,000, held longer, or contributed more than $100 monthly, your returns would have been even better. With this strategy, maximizing your contribution rate and staying invested is key. Don’t try and time the market!

Do you want to implement this passive, hands-off investing strategy? A great ETF to use is iShares S&P/TSX 60 Index ETF, which has a low MER of just 0.20%. XIU trades at around $30 per share right now, making it accessible to investors with a smaller portfolio.

The post How to Start Investing With Little Money appeared first on The Motley Fool Canada.

Before you consider iShares S&P/TSX 60 Index ETF, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in September 2022 … and iShares S&P/TSX 60 Index ETF wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 9/14/22

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Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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FPIs pump in Rs 8,600 crore in September; pace of investment slows – Economic Times

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After infusing more than Rs 51,000 crore last month, foreign investors have slowed down the pace of equity buying in India in September so far, as they invested a little over Rs 8,600 crore, on sharp depreciation in rupee. Going forward, Foreign Portfolio Investors (FPIs) are unlikely to buy aggressively amid rising dollar, VK Vijayakumar, Chief Investment Strategist at , said.

Indication of further rate hike by the US Federal Reserve, fears of a recession, depreciating rupee and continued tensions in Russia and Ukraine will affect FPI flows, Basant Maheshwari, smallcase manager and Co-founder, Basant Maheshwari Wealth Advisers LLP, said.

The latest inflow comes following a net investment of Rs 51,200 crore in August and nearly Rs 5,000 crore in July, data with depositories showed.

FPIs turned net buyers in July after nine straight months of net outflows, which started in October last year. Between October 2021 till June 2022, they sold Rs 2.46 lakh crore in the Indian equity markets.

According to the data, FPIs have bought equity to the tune of Rs 8,638 crore during September 1-23.

However, FPI activity has turned highly volatile with alternate bouts of buying and selling. They have sold on seven occasions in this month so far. In fact, in the last two trading sessions, they have pulled out Rs 2,500 crore from the Indian equity markets.

Vijayakumar has attributed increased FPI selling in recent days to rising dollar and rising bond yields in the US.

In addition, the 75 basis points (bps) rate hike by the US Fed for the third consecutive time to control rising inflation and the surging dollar have impacted FPI buying, Wealth Advisers LLP’s Maheshwari said.

“The US Fed’s hawkish tone on interest rates and the fear of a global recession fuelled pessimism among investors,” Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities, said.

Foreign investors have been slowing down their equity buying in India since September. The scenario turned adverse after a hotter-than-expected inflation report dashed hopes that the US Fed would scale down its rate hikes in the coming months.

The August US inflation edged 0.1 per cent higher from the preceding month to 8.3 per cent. Compared to one year ago, it eased as it was 8.5 per cent previously.

The aggressive stance of the central bank chair, which made it apparent that the Fed will once again go for another 75 bps hike for the fourth consecutive time in its next meeting as well, dented sentiments and turned investors risk averse towards emerging markets like India, Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said.

Also, currency movement is another factor that FPIs track very closely as it has a significant impact on the returns that they make on their investments in any country. Therefore, the outflows tend to accelerate in a scenario of rapid currency depreciation.

The sharp depreciation in Rupee as it touched all-time low of Rs 81.09 against the dollar does not augur well for foreign investments, he added.

“With the dollar index above 111 and the US 10-year bond yield above 3.7 per cent FPIs are unlikely to buy aggressively, going forward. The situation will change if the dollar index and US bond yields decline,” Vijayakumar said.

In addition, foreign investors have pumped in Rs 5,903 crore in the debt market during the month under review.

Apart from India, FPI flows were positive for Indonesia and Philippines, on the other hand, South Korea, Taiwan and Thailand witnessed outflows during the period under review.

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Top 3 investment bets for millennials to beat market volatility and make money – Economic Times

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There is a thrill for many to do things that are so-called out of the ordinary. As mentioned in the first part of this story, millennials are the impatient investor class who are all up to ignore the stereotypes, bet even on riskier investments.

On that note, in the first part we talked about three new-age investments that go beyond the ordinary for the millennials or the digital natives. To know more about millennials and more about the investment options, you can read the first part here:
Top 3 new-age investment bets for millennials looking to take risk and earn big

Nonetheless, it is never bad to be cautious. A roller coaster ride is fun at the amusement parks but when it comes to using the hard-earned money, no one will be keen to lose their savings. It is often said volatility is the daily crux of the market. Experts also opine it can be a motivation to capitalize on the imbalances.

“Volatility is the ghost that haunts you only if you look at it. The best way to avoid volatility is to ignore it; don’t trade into a market when there’s euphoria or out of it when there’s panic. Instead, constrict and hold a diversified portfolio for the long term, or better still, a mutual fund, which isolates individuals from volatility shocks,” Utkarsh Sinha, managing director at boutique investment bank firm Bexley Advisors said.

The economy too is at a volatile juncture with slower-than-expected growth recovery and galloping inflation. For stocks, the plausibility of earnings growth is diluting and valuation is said to trade below the long-term average. So, what could be better than to have some safe options even during a volatile period, enjoy the thrills of new-age investments and still achieve the monetary goals?

Girirajan Murugan, the chief executive officer at FundsIndia, lists more instruments that will help millennials to avoid some volatility:

InvIT – Infrastructure Investment Trust

This involves a trust channeling investments from individuals/institutions toward infrastructure projects. In a developing country like ours, the demand for good infrastructure is huge and perennial, in my opinion, Murugan said, adding that an investment in an InvIT with a good management will be a fruitful investment for the long term.

However, most infrastructure projects are subject to government regulations and interference. Change in the political space could affect such investments. Lack of choices to choose from is a severe disadvantage. Being a budding avenue, the participation in this investment is comparatively low. This means that selling them in the current market could be difficult. However, if the market for this type of investment takes off, then this concern will be void.

REIT – Real Estate Investment Trust

Similar to InvITs, REITs pool resources to invest in real estate assets. “Real estate investment has not lost its flair even today, despite being a conventional investment. That’s exactly why I’d like to call this a “grandfather-approved investment,” Murugan said.

By enabling part ownership, REIT has made real estate more accessible for all sections of people. REIT investments buy you ownership to the property in question, proportionate to the investment made. The income from this asset shall also follow the same proportion.

There are 2 categories of REIT – tradable and non-tradable. Some non-tradable REITs disclose the share values only after 18 months. Non-tradable REITs also carry the disadvantage of less liquidity.

ESG (Environmental, Social and Governance) Investing

In this mode, the investment is directed toward the development of businesses that toil for the betterment of the world. One can either invest through readily available ESG Mutual Funds, or they can identify the right companies and invest in their stocks.

“As far as ESG investing is concerned, it’s a thumbs up from me, and I say this from an ethical standpoint. The reason is that a good planet and a harmonious society are something we can’t survive without. When it boils down to it, man will eventually be forced to choose survival over profitability. If you choose to do it for the purpose, rather than for profitability, this may be one of your best investments,” Murugan said.

ESG assets are on track to exceed $53 trillion by 2025 and represent more than a third of the $140.5 trillion in projected total assets under management (AuM), according to Bloomberg Intelligence.

Bexley Advisors’ Sinha said millennials are at the best point of their lives currently to invest, as they have the bulk of their lives ahead of them. With these options explained, the millennials perhaps have better insight on the options available. Remember how we introduced the generations in the first part of the story and talked about an angry young man from Bollywood? Well, keep the swag and invest with prudence.

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