Re-Industrialising Egypt: China’s $1bn Tyre Investment
Cairo continues to align with BRICS to ensure regime stability amid threats from Washington.
Egypt has signed a $1 billion deal with China’s Sailun Group to build a tyre plant in the Suez Canal Economic Zone, deepening Beijing’s role in Cairo’s industrial strategy. The facility, due to begin operations next year, will produce up to 10 million tyres annually for local use and export to Africa, the Middle East, and Europe. The project aligns with Egypt’s Vision 2030 and China’s Belt and Road Initiative, while offering Cairo economic resilience amid regional instability. Crucially, it also reflects how Washington’s political pressure is nudging Egypt closer to Beijing, accelerating China’s position as a cornerstone partner in Egypt’s industrialisation drive.
Industrial Revival
Egypt’s industrial ambitions hinge on leveraging its strategic location as a trade conduit between three continents. The SCZONE, with its six ports and four industrial zones, offers tailored legal and fiscal incentives, making it a magnet for foreign direct investment. The Sailun facility, covering 350,000 square metres, will enhance Egypt’s automotive supply chain, reducing reliance on imported tyres and generating jobs. This builds on prior Chinese investments, such as the China-Egypt TEDA Suez Cooperation Zone, hosting over 160 Chinese enterprises, and projects like the $10 billion electric train system and the Benban Solar Park. These initiatives reflect a broader strategy to localise production, bolstered by Egypt’s 2024–2025 allocation of EGP 1.5 billion to support industrial ventures, including Sumitomo’s wiring harness plant.
China’s role extends beyond manufacturing. Financial agreements, including currency swaps between the Central Bank of Egypt and the People’s Bank of China, alongside Egypt’s issuance of Panda bonds, facilitate investment and reduce dependence on Western financial systems. These measures align with the BRI’s objective of fostering sustainable development, positioning Egypt as a critical node in China’s global trade network.
BRICS Alignment
Egypt’s pivot towards BRICS, particularly China, is driven by the need for regime stability amid regional and global pressures. The Israel-Gaza war threatens regional trade routes, while U.S. tariffs and geopolitical demands strain Egypt’s economic sovereignty. During Chinese Premier Li Qiang’s 2025 visit, agreements on infrastructure, green energy, and debt-to-investment conversions addressed Egypt’s $8 billion debt to China, enhancing fiscal stability. China’s diplomatic engagement in resolving the Gaza crisis further cements its role as a counterweight to U.S. influence. By aligning with BRICS, Egypt diversifies its economic partnerships, mitigating risks from Western sanctions or trade barriers.
Despite its promise, the Sailun deal faces hurdles. Egypt’s reliance on Chinese investment risks over-dependence, while domestic challenges, including inflation and currency devaluation, could impede project execution. Regional instability, particularly in Gaza, may disrupt SCZONE’s trade routes. Nevertheless, the tyre factory exemplifies how China’s investments bolster Egypt’s industrial capacity and economic autonomy, reinforcing its strategic alignment with BRICS to navigate a complex geopolitical landscape.