New Egyptian capital: China and its palace diplomacy in Africa

Chinese companies are financing and building the new Egyptian capital's massive power center. With the skyscrapers in the desert, China is gaining political influence - but Beijing and Cairo have almost always been close.

Egypt, New Egyptian capital: China and its palace diplomacy in Africa

Only 45 km away from Cairo, Egypt is building a new administrative capital for its government and administration. The city has not yet a name but is already a place of superlatives.

It will be home to the largest parliament building in the Middle East, the biggest military quarter, the world’s biggest automated monorail system, a city park twice the size of central park, the largest mosques, and the site of Africa’s tallest skyscraper, the Iconic Tower, which is the continent’s new landmark and announces to the world: China is in charge here.

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Just a few years ago, only a few streets and a lot of sand could be seen on the satellite images of LiveEO. But since then, mighty skyscrapers have been springing up like mushrooms.

The infrastructure project in the desert on an area of 714 km2, which will cost a total of nearly US$50 billion, is intended to boost Egypt’s economy, relieve the current capital Cairo of nearly 6 million inhabitants and make the country more modern. So much for Egypt’s goals.

Because it is not only President Abdel Fattah al-Sisi who is pursuing his interests east of Cairo, China is also pushing its influence in the Middle East. Beijing is financing the new capital to a large extent and plans to invest around U$9.3 billion by 2027.

BUILDING A CHINA-CENTRIC NETWORK

The Chinese company CSCEC is in charge of the prestigious Iconic Tower, a 385-meter skyscraper. The world’s largest construction company has sent hundreds of Chinese workers to Egypt.

The heart of the new city, the three-billion business district, is being financed largely by China and is being raised in record time. Al-Sisi speaks of the “birth of a new state.”

It is also the birth of an Egypt that maintains closer ties with Beijing than ever before. “Egypt is a key and hinge state for China in the region with regard to Africa and the Arab world,” Moritz Rudolf of Yale Law School is certain. He says Egypt is a very important partner – economically, politically, and strategically speaking.

“In addition to economic interests of the state-owned enterprises involved, China hopes to be perceived as a good and reliable partner,” Rudolf analyzes.

He says that China is betting on the card that word will get around about its involvement in positive pilot projects in the region. “In the medium or long term, a new China-centric network may emerge,” Rudolf explains.

Not surprisingly, capital construction is not Beijing’s only activity in the region: Chinese state-owned companies are also involved in building infrastructure; Exim Bank of China, for example, is financing a train line between Cairo and the new capital for US$1.2 billion. China is also the largest investor in the Suez Canal’s expansion, part of al-Sisi’s modernization program.

China was also active in Egypt in the vaccination campaign; there was cooperation in the construction of a vaccine production center. In the process, China was able to spread the narrative that Egypt had experienced a technology transfer unlike any other African country. An important symbol on the continent at the soft power level.

MASSIVE INVESTMENT IN THE REGION

Since 2014, when al-Sisi came to power, China has significantly increased its investments. According to a study by the Africa Center at Johns Hopkins University, Egypt received nearly US$5 billion in Chinese funds between 2015 and 2019, up from just US$280 million in the previous 12 years.

“Such projects make it easier for Beijing to tap into the African market and make investments,” Rudolf says. He adds that transportation routes in the Middle East as part of the “New Silk Road” are also strategically important for China when it comes to exports to Europe.

“In addition, China naturally wants to secure its own energy supply,” Rudolf says. The region accounts for half of China’s ten largest oil suppliers.

SECURITY POLICY

Observers also assume that China is pursuing security policy motives. In 2016, Beijing established its first overseas military base in Djibouti. “China knows it can’t win Europe, but African countries are oriented toward both the West and China – there’s something to be gained here,” Rudolf says.

He adds that China is strategically trying to serve the interests of these countries’ interests. “This often involves infrastructure projects that the West would not dare approach,” he observes. However, he says, these are not transactional deals like “new port” versus “voice in the UN Human Rights Council.”

“Common interests and interpretations have been growing for decades; Cairo and Beijing have been close for a long time,” Rudolf says.

He adds that China and Africa have a similar perspective on human rights issues. In developing countries, he says, the focus has traditionally not been on individual human rights but rather on economic, social, and cultural rights, such as development or health.

“China is the spokesperson for the other developing states here. Its growing political influence is cementing this approach,” Rudolf explains. However, the expert believes it is the wrong reading to characterize the commitment in Egypt as development financing.

Rendering of the new capital. (Photo internet reproduction)
Rendering of the new capital. (Photo internet reproduction)

COOPERATION AT EYE LEVEL

Egypt is not just part of an Africa strategy in which Beijing is increasing its political influence. The strategy describes the trend of more and more African states turning to China for money and investment.

Egypt is both Arab and African for China. In the Middle East, China is also massively expanding relations with Iran, Israel, and Saudi Arabia – at eye level. That applies to technology cooperation and the financial industry, for example.

There are several examples of Chinese involvement in the region: in Algeria, China has supported the construction of a large mosque; in Ethiopia, it has co-financed rail links; and in Saudi Arabia, it has built technology parks.

There is also said to be an agreement in principle with Iran, which is expected to bring Chinese investment of US$400 billion over the next 25 years into the country.

Whatever form of quid pro quo Beijing expects, its influence is growing in any case.