With a market of 100 million people and being a global low-tariff area, Chinese car companies are flocking to Egypt.

On the third day of the first lunar month in 2025, a welcome ceremony titled "Welcome Chinese Tourists to Celebrate the Chinese New Year in Egypt" was held at Cairo International Airport. Officials from the Egyptian Tourism Promotion Board presented local specialty gifts to more than 300 Chinese tourists who had arrived in Egypt.

When Chinese tourists flocked to the Pyramids and the Sphinx and experienced the exotic charm of this ancient civilization along the Nile River, they couldn't help but notice the Transsion or Xiaomi phones in the hands of Egyptian tour guides, or the BYD cars shuttling through the streets and alleys of Cairo. What tourists may not know is that when strolling in the Egyptian Museum and gazing at the mummies from four thousand years ago, the gentle breeze blowing overhead also comes from the central air - conditioners of Midea or Haier.

Compared with the popularity of outbound tourism, Egypt has seemed more marginal geopolitically and economically in the past few years. When it comes to going global to the Middle East, people often think of Saudi Arabia or the United Arab Emirates first, while overlooking Egypt on the other side of the Red Sea.

In fact, some large state - owned enterprises in the construction industry and leading enterprises in the manufacturing field have long been engaged in construction and investment business in Egypt. "Egypt is not only a large market with a population of over 100 million, but also can serve as a hub radiating North Africa and the Middle East, and even a springboard to reach the European and American markets." Xiao Ni, the China - region head of the Egyptian consulting firm Industry 4.01, told us that Egypt is becoming a new "hotspot" for Chinese manufacturing enterprises to go global.

Since the beginning of this year, Xiao Ni has occasionally posted short videos on Douyin and Xiaohongshu, sharing Sino - Egyptian trade opportunities and introducing the Egyptian market. These videos, which were casually recorded either in the kitchen or while walking on the street, always attract a large number of merchants' attention. "We receive dozens of messages in the background every day, asking about how to do business in Egypt. The enterprises' demand is very urgent, urging us to advance the projects. We're simply swamped," said Li Haodong, Xiao Ni's partner, both excitedly and helplessly.

1. 60% of the population are young people under 30

Although Egypt's GDP scale is second only to Saudi Arabia and the United Arab Emirates in the Middle East, reaching 403 billion US dollars in 2024, due to a population of over 100 million, the per - capita GDP is only 3,748 US dollars, even lower than that of Iraq and Lebanon. Therefore, compared with the high - consumption levels of the "nouveaux riches" in countries like Saudi Arabia, the characteristic of the Egyptian consumer market is that there are a large number of low - income people, with a strong demand for high - cost - performance daily necessities.

Secondly, women without headscarves can be seen everywhere on the streets of Cairo, and women's underwear products are allowed to be sold openly in the market. This relatively secular social atmosphere also provides an open growth space for the Egyptian business ecosystem.

Among Egypt's population of over 100 million, 60% are young people under 30, and the penetration rate of mobile phones and the Internet is high. Data from the Chinese Ministry of Commerce shows that the information and communication technology industry has been one of the fastest - growing industries in Egypt for five consecutive years (from 2020 to 2024). As of December 2024, the total number of Internet users in Egypt reached 87.42 million, accounting for 74% of the total population.

Moreover, 96% of Egypt's population is concentrated in the delta region of the lower Nile River. The population density in the capital Cairo is as high as 20,000 people per square kilometer. The concentrated population distribution helps to reduce logistics costs - all these factors have created conditions for the development of e - commerce. In addition to the African local platform Jumia and Amazon, Chinese cross - border e - commerce platforms such as AliExpress and SHEIN have also achieved rapid business growth in Egypt with their low - price supply.

If the Egyptian public welcomes cheap and practical goods, the government hopes to attract more foreign - funded enterprises to enter Egypt, creating new jobs and improving Egypt's overall industrial level at the same time. Xiao Ni introduced that currently, the Egyptian government mainly provides policy incentives such as tax rebates, land returns, and recruitment subsidies to foreign - funded enterprises.

2. An untapped global tariff low - lying area

For Chinese enterprises to build factories in Egypt, in addition to better meeting the local market demand, the more important thing is that they can then export to other regions. "Many people may not know that in fact, Egypt is also very suitable as a transit point for entrepot trade," said Xiao Ni. "Unlike other Middle Eastern countries, Egypt cannot rely on oil to obtain a large amount of US dollars. Therefore, it also welcomes foreign - funded enterprises that can help Egypt earn foreign exchange."

Over the past 30 years, thanks to its good diplomatic relations, Egypt has signed numerous free - trade and preferential - trade agreements with neighboring African and Middle Eastern countries, as well as the European Union and the United States, enabling Egyptian - exported goods to freely enter other markets:

• In 1994, the Common Market for Eastern and Southern Africa (COMESA) was established. Its member states include 21 African countries such as Burundi, Comoros, the Democratic Republic of the Congo, Djibouti, and Egypt. They enjoy a zero - tax rate on imported goods and raw materials for investment among member states. It is the earliest and largest sub - regional economic organization in Africa.
• In 1996, a Qualifying Industrial Zone was established with the United States and Israel. This means that for products exported to the United States, as long as they contain at least 10.5% of Israeli industrial materials or service components and 24.5% of Egyptian industrial materials or service components, these products can be completely exempted from tariffs when entering the US market.
• In 1998: The Greater Arab Free Trade Area (GAFTA), proposed by Egypt, was officially formed. The 18 GAFTA countries exempt all tariffs and fees from each other and allow diagonal cumulation of origin (the cumulative rule is interpreted internationally as allowing countries to use parts produced in specific third countries without having to comply with the usual origin requirements, as long as these parts have undergone further processing in the exporting country enjoying the preferential treatment). The 18 member states of the Greater Arab Free Trade Area include the six Gulf countries and Arab countries such as Algeria, Egypt, Iraq, Lebanon, and Libya. Through measures such as establishing a customs union and reducing tariffs, regional trade barriers are eliminated, and a common market for Arab countries is established.
• In 2004: The Agadir Free Trade Agreement was signed with Jordan, Morocco, and Tunisia
• In 2010: A free - trade agreement was signed with the Southern Common Market countries (Mercosur, whose member states are Brazil, Argentina, Uruguay, Paraguay, and Venezuela)
• In 2020: A strategic partnership was established with the European Union, allowing diagonal cumulation of origin for Mediterranean countries.
• In 2024: A free - trade agreement was signed with Turkey.

In April this year, US President Trump imposed "reciprocal tariffs" globally. 51 African countries were included in the list, and only the lowest - grade 10% tariff was added to Egypt.

3. Subtle changes under the popular investment track

Although infrastructure construction, agricultural machinery equipment, agricultural technology, and the automobile manufacturing industry have always been key areas for investment in Egypt, the focus of official support and encouragement and potential opportunity points are all changing.

For example, after Egypt signed the "Belt and Road" cooperation document with China in 2016, the infrastructure field became a key project for Chinese enterprises to invest in Egypt, especially participating in the construction of Egypt's new capital - New Cairo. Recently, the General Authority for Investment and Free Zones (GAFI) in Egypt revealed that currently, 2,800 Chinese companies are operating in Egypt, with a total investment of over 8 billion US dollars, including well - known enterprises such as OPPO, Haier, Jushi, Midea, TEDA, and Huawei.

When more infrastructure enterprises were gearing up to enter the Egyptian market, they found that the infrastructure demand in Egypt had changed. An enterprise that had communicated with Egyptian business officials recently told us that in terms of road and housing construction, enterprises such as China Construction Group have established long - term and stable cooperation locally. The government welcomes enterprises with experience in industrial park and factory construction more.

The change in market demand is also reflected in the automobile industry.

Many leading automobile enterprises have been deeply involved in the Egyptian market for many years. For vehicle - export traders who are just planning to enter the Egyptian market now, the opportunity window has actually passed. "The Egyptian counselor told us that the government hopes to achieve localized production across the entire upstream and downstream chain of the automobile industry, so it is more interested in enterprises with such capabilities," a used - car export manufacturer told us.

It's not just that Egypt welcomes enterprises to set up local production. Domestic automobile enterprises have also realized the importance of localized production. "For Egyptian consumers, the prices of domestic second - hand cars are generally on the high side. They don't really care about the interior and performance of the cars, or whether there is an air - conditioner. Instead, they are more concerned about whether the cars are durable, preferably able to carry both passengers and goods," said the above - mentioned manufacturer. They plan to find partners in Egypt to develop and produce joint - venture models that meet local needs, "similar to when Volkswagen launched the Santana in China back then."

4. Opportunities and challenges of localized investment

In the "Vision 2030" proposed by the Egyptian government in 2015, the economic - field goal includes "the development of renewable energy projects and local and foreign investment, which will help meet the growing energy demand without interrupting services."

Under this goal, Egypt launched the "Electric Vehicle Development Plan" in 2018, aiming for electric vehicles to account for 10% of the total number of vehicles by 2030. In 2022, Egypt launched the national strategy for the localization of the automobile industry and established the Supreme Council for the Automobile Industry to promote the localization of automobile, especially electric - vehicle, production.

Therefore, shifting from vehicle exports to technology exports has become the main trend for Chinese automobile enterprises to go global to Egypt. Currently, automobile enterprises such as GAC, Geely, SAIC, BAIC, Chery, BYD, and Great Wall have all started the construction of CKD (Completely Knocked Down) local factories in Egypt through wholly - owned subsidiaries or joint - venture methods.

However, it should also be noted that Chinese automobile enterprises still face some insurmountable limitations when building factories in Egypt. In addition to the common challenges of language and cultural differences, 96% of Egypt's land is covered by deserts, and the available land resources are scarce. The developable areas are all concentrated around large cities along the Nile River and in the delta region. As the number of enterprises entering Egypt increases, land prices are rising, and it is becoming increasingly difficult for enterprises to find suitable land for factory construction.

Secondly, although Egypt has a coastline of more than 2,700 kilometers, large - scale ports are basically concentrated in cities such as Alexandria, Damietta, and Port Said along the Mediterranean coast. According to the latest data from the Ministry of Foreign Affairs, the current port throughput in Egypt is 8 million TEUs. Although Egypt is vigorously building more ports, the current throughput is less than half of Vietnam's, and the capacity to undertake entrepot trade is limited.

Xiao Ni believes that not all industries are suitable for setting up in Egypt. He suggests that enterprises conduct on - the - spot investigations in Egypt before deciding to invest there. They should clearly understand the layout of the upstream and downstream of the supply chain locally, the actual support from the government for their industry, and the business and cultural environment in Egypt.

"Just as the Chinese saying goes, practice is the sole criterion for testing truth," said Xiao Ni.

(Authors: Feng Yaling, Yang Yuexin)