BEIJING: China has called for an end to attacks on civilian vessels in the Red Sea that have dramatically widened the Hamas-Israel conflict and placed Beijing’s commercial interests along the Suez Canal at risk.
The Iran-backed Houthi militia from Yemen that seeks “Death to Israel” is challenging the ability of the world’s biggest trading nation to defend billions in strategic investments in Egypt.
Since President Abdel-Fattah el-Sisi came to power in 2014, China has stepped up its investment and commercial activities along Egypt’s Suez Canal, through which a significant amount of the Asian giant’s West-bound goods flow.
INVESTMENT AND TRADE
Beijing has encouraged state-owned companies to invest tens of billions in Egypt’s logistics, transport and energy sectors, data from the American Enterprise Institute (AEI) think tank shows, and has extended US$3.1 billion in loans, according to the World Bank.
And in the months leading up to Hamas’ Oct 7 attack on Israel alone, firms from China and Hong Kong pledged at least US$20 billion in various projects along Egypt’s arterial waterway.
Attacks deterring commercial shipping from the Red Sea and Suez Canal could frustrate Chinese investors who have committed huge sums to the waterway’s development to profit from their safe passage.
State-owned shipping giant COSCO, which on Jan 7 joined Maersk, Hapag-Lloyd, Evergreen, and other major shipping lines in suspending services to Israel, last March invested US$1 billion in Egypt’s port infrastructure, according to the AEI.
COSCO was joined by CK Hutchison Holdings, a prominent Hong Kong-based congolomerate, which in March announced plans to put up a further US$700 million to develop a new container terminal in the Red Sea port of Ain Sokhna and in B100, a new container terminal in the Mediterranean port of Alexandria.
That same month, demonstrating China’s broader commercial interests in Egypt as a link between Asia and Mediterranean and European markets, Xinxing Ductile Iron Pipes made known plans to invest US$2 billion in iron and steel plants, also in Ain Sokhna.
And in October, Egypt’s Suez Canal Economic Zone struck a US$6.75 billion deal with state-owned China Energy to develop green ammonia and green hydrogen projects in the Sokhna Industrial Zone, as well as a US$8 billion agreement with Hong Kong-listed United Energy Group to establish a potassium chloride production site.