Presidential tour
highlights strategy of shifting manufacturing abroad, shielding domestic exporters
from growing global barriers
·
Strategic
diversification:
Xi Jinping’s visits to Central Asia and Egypt highlight China’s strategy to diversify
trade routes, supply chains, energy sources and export markets amid tariffs and
geopolitical disruptions.
·
Egypt
as a strategic gateway:
China sees Egypt as an important manufacturing and logistics hub connecting Africa, the Middle East and the Suez Canal
trade route.
·
Expansion
of Chinese manufacturing: The two countries plan cooperation in renewable energy, data centres, semiconductors, space applications, critical minerals,
agriculture and automobile manufacturing.
·
Localising production abroad: China is encouraging overseas
manufacturing to reduce dependence on direct exports from China and potentially
lessen exposure to foreign tariffs and trade restrictions.
·
Greater
use of local currencies:
China and Egypt plan to expand the use of the yuan and Egyptian pound for trade and investment
settlements and may expand their currency-swap arrangement.
·
Central
Asia connectivity:
At the SCO summit in Kyrgyzstan, Xi promoted deeper cooperation in trade, energy, transport, AI and technology,
including support for the Middle
Corridor (Trans-Caspian Transport Route).
·
Resources
and market access:
Central Asia offers China access to important energy and mineral resources, while Egypt provides
access to African and Middle Eastern markets.
·
Potential
Western scrutiny:
Increased Chinese manufacturing and trade through third countries could face greater
scrutiny from the US and EU,
particularly regarding possible tariff circumvention, transshipment and sanctions
evasion.
·
Alternative
global economic framework: China is strengthening partnerships across the Global South
through investment, infrastructure financing and institutions such as the Belt and Road Initiative,
offering alternatives to Western-led economic systems.
·
Trade
growth reflects stronger ties: China-Egypt trade reportedly rose 19.7% to US$20.8 billion in 2025,
while China-Kyrgyzstan trade increased 19.8%
to US$27.2 billion, underlining China's rapidly expanding economic
presence in both regions.
[ABS News Service/04.09.2026]
President Xi Jinping’s
journey from Central Asia to Egypt highlights Beijing’s efforts to strengthen alternative
trade, energy and manufacturing networks across Eurasia and Africa, analysts said,
as wars and tariffs expose a reliance on vulnerable supply routes and overseas markets.
Xi arrived in Egypt
on Tuesday for his first visit in 10 years after attending a summit of the Shanghai Cooperation Organisation
(SCO) in Bishkek, Kyrgyzstan, where state leaders including Indian Prime Minister
Narendra Modi and Russian President Vladimir Putin agreed to deepen economic and
financial ties.
According to a joint
statement issued by China and Egypt on Thursday, the two sides will explore cooperation
in renewable energy, data centres, semiconductors and space applications, as well
as critical-mineral supply chains, agriculture and car manufacturing.
The two countries also
welcomed the renewal and potential expansion of their bilateral currency-swap agreement
and called for greater use of the yuan and Egyptian pound in trade and investment
settlements.
Ahead of Xi’s visit
to the North African country, both he and his Egyptian counterpart, President Abdel-Fattah
el-Sisi, signed op-eds that were published in each other’s leading newspapers, outlining
their vision for closer bilateral ties, including expanded Chinese investment in
the strategic bridge between Africa and the Middle East.
Xi’s journey comes amid
a continued US-China tariff war and mounting geopolitical instability, as wars disrupt
shipping routes, drive up energy prices, and – together with extreme weather – deepen
threats to global food security.
The trip reflects a coherent strategy to diversify trade routes and
expand access to resources and markets through Central Asia’s overland links and
Egypt’s manufacturing base and Suez Canal gateway, according to Su Yue, principal
economist for China at the Economist Intelligence Unit (EIU).
“Alternative trade routes and overseas production give Chinese companies
more options and reduce dependence on direct exports from China,” she said.
In Xi’s article, which ran on Tuesday in major Egyptian publications,
he called for China and Egypt to capitalise on the latter’s strategic position linking
the Arab world with Africa and use it to deepen Chinese engagement across both regions,
according to a Xinhua readout.
On the same day, Sisi’s op-ed ran in People’s Daily, a Communist
Party mouthpiece, and said that Cairo aimed to attract more Chinese companies and
industries, including manufacturers of electric vehicles, energy storage batteries,
renewable energy, electronics, desalination equipment, components and shipbuilding.
The two countries should also deepen technology transfers in telecommunications,
artificial intelligence and space science, Sisi said, identifying those sectors
as priorities for the next stage of bilateral economic and technological cooperation.
The Egypt visit followed Xi’s appearance in Bishkek, where he promoted
deeper trade, energy and connectivity ties between China and other SCO economies.
Xi pledged continued cooperation with member states on solar and wind projects,
the development of an AI application centre, and 100 joint science and technology
projects over the next three years.
China will also support
upgrades to the Trans-Caspian International Transport
Route – widely known as the
Middle Corridor – and establish a centre in Tianjin to promote cooperation among
ports and border crossings across SCO member countries, according to a Xinhua readout
on Tuesday.
A declaration signed
by China and the SCO’s other nine members called for reforms to global financial
institutions, aiming to give developing countries greater representation and influence
at the World Bank and International Monetary Fund.
Furthermore, the declaration
called for greater use of the bloc’s transit potential, more resilient energy supply
chains, and deeper cooperation on agriculture and food security.
The EIU’s Su said Central Asia’s energy and mineral resources, along
with Egypt’s access to African and Middle Eastern markets, formed part of a broader
Chinese strategy to localise production and reduce exposure to geopolitical disruptions.
But growing trade through third countries could draw greater scrutiny
from the United States and European Union over sanctions evasion and transshipment,
she warned.
There was also a political logic to Beijing’s approach, according
to Alfredo Montufar-Helu, China-based managing director at Ankura Consulting. That
thinking, he said, entails finding partners to support the institutions and initiatives
that China has built to compete with the Western-led order, including Beijing’s
Belt and Road Initiative and, more recently, its global governance, security, civilisation
and development initiatives.
“The offer is transactional: financing and investment without the
conditions Western lenders attach,” Montufar-Helu said. “At a moment when the US
has pulled back from multilateral institutions and is actively disrupting global
trade rules, it’s not surprising that the offer resonates across the Global South.”
The two relationships are already underpinned by rapidly expanding
commerce. China-Egypt goods trade rose 19.7 per cent to US$20.8 billion in 2025,
according to Chinese customs data. The surge was said to be largely driven by Chinese
exports of machinery and manufactured goods, alongside investment in Egyptian infrastructure
and industrial estates.
Similarly, China-Kyrgyzstan trade increased 19.8 per cent to US$27.2
billion, dominated by Chinese consumer and industrial exports, while minerals, energy
and transport infrastructure remained central to their broader economic relationship.