Chinese Company to Manage Industrial Park Near Suez
China has reached an agreement with Egypt to set up an industrial zone near Suez that is expected to attract $2.5 billion in Chinese investment.
The park will be managed, financed and developed by the Chinese company TEDA.
TEDA will develop the zone over the next ten years and combine a range of industries including textiles, electronics and auto parts.
Egyptian Reforms
The industrial zone deal is part of the Egypt's larger goal of attracting more foreign direct investment into the country.
Egypt has cut its corporate tax rates from 40% to 20% over the past two years and lowered its customs charges from an average of 15% to 7%.
These reforms coupled with others have had their intended effect.
Egypt attracted a record $6.1 billion in foreign investment during the last fiscal year.
This year's number is expected to top $10 billion.
China and Egypt
The industrial park deal is another piece of what seems the beginning of a win-win partnership between Egypt and China.
Egypt is seen as a base for Chinese production of exports to Europe -- a market Chinese companies surely have their eyes on.
In return Egypt gets the infrastructure development that comes along with cheap and abundant Chinese capital.
China recently gave $200 million dollars in soft loans to Egyptian companies who purchased production lines and other equipment from China.
Egyptian politicians have hailed the deals and called for more.
