Egypt focuses on China for banking expansion in light of Belt and Road Initiative

CAIRO - The Egyptian banking sector focuses on the Chinese market for external expansion to enhance mutual trade between Egypt and China in the light of the Belt and Road Initiative, the vice chairman of an Egyptian giant national bank said in an interview with Xinhua.

"We see China as one of the priorities of our bank for external expansion due to the large Chinese market and the volume of trade between China and Egypt that has exceeded $11 billion," Banque Misr Vice Chairman Akef Abdel-Latif al-Maghraby said.

He added that the Chinese investments in Egypt are about $600 million and they are expected to greatly rise in the near future, which is why his Banque Misr attaches importance to attend the upcoming Belt and Road Forum for International Cooperation that will be held in Beijing on May 14 and 15.

Proposed by China in 2013, the Belt and Road Initiative aims to revive ancient land and sea trade routes that link China with many countries in Asia, Africa and Europe via trade and infrastructure networks.

"Hence, we see that the Egyptian banks should have strong presence in China to facilitate mutual trade, whether exports or imports, and more importantly to attract Chinese investments to Egypt," the vice chairman of Egypt's second largest national bank told Xinhua.

The banker said that Banque Misr representatives will be among an Egyptian high-profile ministerial delegation scheduled to visit China to attend the mid-May forum in Beijing "due to its significance to us."

"The Belt and Road Initiative will restore cooperation and investment opportunities and will increase Egyptian trade not only with China but all other states included in the initiative," Banque Misr vice chairman said.

Maghraby noted that a key part of his visit to China for the forum is a loan agreement to be signed with China Development Bank (CDB) to provide Banque Misr with $500 million to finance joint projects in the Arab country for eight years.

CDB is the largest Chinese bank for foreign investment and financing cooperation. It chose Egypt as the destination for its first overseas representative office established in 2009 to be the only Chinese financial institution in Egypt.

It has also provided financial service to support various sectors in Egypt including energy, telecommunication, banking, manufacturing and SMEs. By the end of 2016, CDB's loan outstanding in Egypt has been more than $2 billion.

"Besides, we'll make a number of visits to Chinese companies and investors to help them enter the Egyptian market and remove any obstacles they may be facing," Maghraby said.

It has also opened a representative branch in Guangzhou city of Guangdong province and is planning to establish similar branches in China in the near future.

Maghraby continued that Egyptian banking and financial cooperation with China is "promising" and "very comfortable" due to the transparency of the Chinese side and the closeness between the peoples of the two countries.

"We hope this closeness can be translated into more Chinese investments in Egypt and also to bring the knowhow of Chinese technology and industry to our country," he told Xinhua.

He added that his country should learn from the Chinese experience that raised China to become the world's second largest economy within 40 years, noting that China's interest in investment in Africa is good for Egypt.

"China greatly developed over the past two decades in various fields and it focuses on technological industries and foreign investments today, which is a new shift for the Chinese economy that used to focus on labor-intensive industries," the senior banker said.

Egypt has been suffering economic slowdown over the past few years due to political turmoil and relevant security issues, which led the country to adopt a strict economic reform program including austerity measures, energy subsidy cuts and local currency floatation, all encouraged by a 12-billion-dollar loan from the International Monetary Fund.

"We have issues and we still do, but we're moving in the positive direction through our economic reforms and currency floatation, which reflected on increasing competitiveness of the Egyptian companies and products," the Banque Misr official said.

In late 2016, the central banks of Egypt and China signed a currency swap deal worth 18 billion yuan ($2.62 billion) to bolster economic activities in the North African country.

"It's a good and useful deal because it promotes mutual trade between the two countries and broaden the sphere of their mutual trade," Maghraby remarked.

He concluded that the Egyptian-Chinese economic relations are "heading in the right direction but with a bit slow pace," vowing that Egypt will work hard on removing all obstacles facing Chinese investors in the country.