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Stability of EGP value a good sign to exchange currencies between Egypt, China, says Chinese ambassador - Daily News Egypt

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Stability of EGP value a good sign to exchange currencies between Egypt, China, says Chinese ambassador

Egyptian exports to Chine have been increased by 300% during previous year due to efforts by two governments, says Song


Egypt is in urgent need for encouraging foreign direct investments. Furtherly, the country’s investment climate needs other regulations to be developed, in a way to facilitate foreign investment, and the government has to have long-term strategy for foreign investors, according to the Chinese Ambassador to Egypt Song Aiguo.  

Song said that his embassy is studying moving to the New Administrative Capital, once the embassies’ district is completes, as well as studying the land size for constructing an embassy there, in addition to the prices.

In mid-August, China and Egypt signed an agreement regarding launching a railway project, which will link the railway lines between central Cairo, 10th of Ramadan City, and the New Administrative Capital.

Regarding bilateral trade exchange between the two countries, statistics show an increase by 26%, during the first quarter of 2018, reaching $2.8bn compared to the same period last year.

Chinese imports from Egypt were at about $450m, a 50% increase when compared to last year. The trade imbalance decreased.

Daily News Egypt sat down for an interview with Song, to get more insight into the Chinese investments in the New Administrative Capital and other regions of Egypt. The transcript for which is below, lightly edited for clarity:

Will Chinese Embassy move to  New Administrative Capital embassies’ district when it is completed?

Well, we are interested in having a place there because if the capital developed the district our friends in other embassies will be there, as it will be an added-value to our diplomatic relations.

Now we are studying the whole subject regarding the land and its size, in addition to the prices.

Further, we are interested in having more details on such subject. 

Shall we expect a Chinese delegation to visit capital to know investment opportunities in area?

We have already a cooperation in the capital not only in the capital, but also in the development of whole fields such as industry, building hospitals, infrastructure, and construction in the capital.

In mid-August, China, and Egypt signed an agreement regarding launching a railway project, which will link the railway lines between central Cairo, 10th of Ramadan City, and the New Administrative Capital.

Are there any talks by Chinese companies to invest in New Administrative Capital?

Chinese companies are always in talks with the Egyptian government to identify various investment opportunities. As Egypt is an important country in the Arab world and the African continent and the Chinese-Egyptian cooperation is an important part of the collective cooperation between his country and African countries.

What are the update regarding the exchange of the currency?

In December 2016, the Egyptian central bank and the People’s Bank of China signed a currency swap agreement involving RMB 18bn, which provided Egypt the same amount of liquidity to help ease the pressure from foreign exchange reserves. The currency swap will definitely tap capital resources for infrastructure and real economy and should be well implemented on the market level.

It was a big problem two years ago, since the flotation of the Egyptian pound. I think it seems that exchange rate since last year is stable, which is a good sign to exchange between the Egyptian pound and the Chinese currency.

In late 2016, the Chinese Yuan has become one of the currencies of the basket of the IMF, which is also a good step in the exchange process.

You told me in previous meeting that there are some technical issues that hinder exchange of currencies of two countries. Are these issues still existed?

Now it seems that there is a gradual improvement in that issue, whereby, the China Development Bank signed a contract with Société Arabe Internationale de Banque (SAIB), fworth RMB 250m, to be pumped into the Egyptian market, through funding Chinese businesses in Egypt,o hence the issue is moving.

Shall we expect more Chinese delegations to visit Egypt in coming period?

In April, the biggest delegation ever visited Egypt was for the purpose in mind to contract on a Chinese textile city, however, they will continue visiting Egypt to follow-up, and I expect more companies to visit the country to identify more investment opportunities.

How do you see stability in EGP value after two years of flotation?

The stability in the EGP is a good sign and an indicator that the Egyptian economy is now on the right track and we expected more, as we need a long-term stability, which will reflect on the economy’s growth. 

What other measures need to be done in coming period to keep moving further ahead?

First, the country should keep the growth rate at a certain level. Egypt now is moving forward, as its GDP growth rate is above 5%, which requires all sectors of the economy to work in an efficient way.

Furthermore, there is an urgent need for encouraging foreign direct investments. Recently, Egypt has developed a New Investment Law, but it is not enough, which needs other regulations to be developed to facilitate foreign investment, and the government has to have long term strategy for foreign investors.

Which are most promising sectors in Egyptian market?

My understanding that Egypt is a country of a large population and there are many areas to invest in. 

Are there any complaints regarding Egyptian exports to China?

Egyptian exports to Chine have been increased by 300%, during the previous year, due to the efforts by the two governments.

In this regard for promoting trade and exports to China, the China International Import Expo, is expected to be held in November in China, for the first time, with significant participation from the Egyptian side.

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