TEDA Cooperation Zone Accelerates Upgrading to Help Egypt Realize 2030 Vision

On the shore of the Red Sea and the south of the Suez Canal, the China-Egypt TEDA Suez Economic and Trade Cooperation Zone (hereinafter referred to as the "Cooperation Zone") is full of vitality: the infrastructure is becoming more and more perfect, the investment momentum is strong, and the industrial clusters are booming ...... After 16 years of development, the cooperation zone has become a good platform for investment and cooperation between Chinese and Egyptian enterprises.

Over the past 10 years, the cooperation zone has continued to grow, gradually upgrading from "industrial clusters" to "industry-business collaboration. Since 2021, the cooperation zone has successfully promoted the official operation of the first Chinese-funded bonded warehouse project in Egypt, and at the same time strives to build an international commodity distribution center and an automobile and spare parts distribution center.

Zhou Yiqi, an associate researcher at the Center for West Asia and Africa Studies of the Shanghai Institute of International Studies, told the 21st Century Business Herald that the status of the TEDA Cooperation Zone lies in its exemplary role. It is of great significance to the Middle East and North Africa, and even to countries in the global South. A new plan for developing countries to seek their own economic self-improvement has the characteristics of both localization and innovation.

This year, China and Egypt will celebrate the 68th anniversary of the establishment of diplomatic relations and the 10th anniversary of the establishment of a comprehensive strategic partnership. Over the years, China-Egypt relations have been continuously upgraded. Liao Liqiang, Chinese ambassador to Egypt, once said that over the past ten years since the establishment of a comprehensive strategic partnership, China and Egypt have continuously consolidated their political mutual trust, firmly supported each other on issues involving each other's core interests and major concerns, and achieved fruitful results in practical cooperation. high-quality joint construction of "Belt and Road Initiative" has handed over a brilliant "report card".

Works of Miracles Like Emie

The China-Egypt TEDA Suez Economic and Trade Cooperation Zone, located at the intersection of the three continents of Asia, Africa and Europe, is called "TEDA" by locals. It is a transliteration of the English acronym TEDA of Tianjin Economic and Technological Development Zone, which was founded in 1984. Just from the name, we can know the close connection between the cooperation zone and TEDA.

In the 1990 s, Egypt saw the rapid development of China's development zones and hoped that China would help Egypt build development zones in Suez. In 1998, the State Council determined that the Tianjin Development Area would undertake the construction of the Northwest Suez Economic Zone. In 2007, it was learned that China proposed to establish 3 to 5 overseas economic and trade cooperation zones in African countries. Tianjin TEDA Investment Co., Ltd., which has participated in the construction of the Northwest Economic Zone of Suez in Egypt for more than ten years, participated in the bidding for overseas economic and trade cooperation zones. In 2008, the construction of the China-Africa TEDA-led cooperation zone jointly established by TEDA Holdings and the China-Africa Development Fund has opened a new chapter since then.

"Investment in the construction of economic and trade cooperation zones is becoming more and more popular among developing countries, and the same is true for Egypt." Ma Hanzhi, an assistant researcher at the Institute of Developing Countries of the China Academy of International Studies, told the 21st Century Business Herald that Egypt has a unique geographical location and is eagerly looking forward to creating jobs through the construction of an economic and trade cooperation zone, increasing taxes, and using the radiation effect of the economic and trade cooperation zone and innovation The industrial technology transfer effect will further enhance Egypt's industrial development level.

The logo of the cooperation zone is very special. It is surrounded by 6 green leaves in the shape of a flower. Liu Aimin, chairman of China Africa TEDA Investment Co., Ltd., once explained, "we will show it in the shape of an Egyptian 'yimihua', hoping to write a miracle here." It is reported that Yimi flower is a kind of transparent 6-petal flower in Egyptian legend, which is regarded as a symbol of tenacity, faith and miracle. The symbolic meaning of immi flower also affects every "TEDA" unconsciously ".

Recalling the beginning of the construction of the cooperation zone, Wei Jianqing, deputy general manager of China-Africa TEDA Investment Co., Ltd., is still deeply impressed by the scene at that time. He said that before the arrival of the TEDA Cooperation Zone, the local infrastructure was very incomplete, basically a barren Gobi Desert, water resources and power supply were difficult to guarantee, and water and power outages often occurred. After that, the cooperation zone focused on the construction of infrastructure, supporting facilities, living services and commercial facilities. Up to now, the cooperation zone is the only local industrial park that has completed the "seven links and one leveling" and realized all-round supporting facilities, allowing enterprises to directly settle in.

Zhou Yiqi also shared with reporters from 21st Century Business Herald his feelings when he went to the cooperation zone for research in 2019. He said that on the way to the park, the intuitive feeling of the Red Sea on the edge, but the towns along the Suez city are relatively backward, infrastructure has a lot of room for improvement, "it can be seen that Egypt has the need to establish an economic and trade cooperation zone here. Egypt is trying to follow the development path of mature industrial countries, play the industrialization potential of the Suez Canal, take advantage of good economic geography, and enhance Suez's coverage and radiation of the regional economy."

Rooted in the cooperation zone for many years, in the eighth year of construction, "TEDA" ushered in a highlight moment-on January 21, 2016, the heads of state of China and Egypt jointly unveiled the second phase of the China-Egypt TEDA Suez Economic and Trade Cooperation Zone. Wei Jianqing introduced that the industrial planning of the first phase and the second phase have their own emphasis. The enterprises in the first phase mainly cover new building materials, high and low voltage electrical, mechanical equipment and petroleum equipment, while the second phase mainly covers passenger cars, textiles, Building materials, chemical and home appliance companies. Moreover, the second phase of the project will further enrich the functions of bonded, warehousing, logistics, and finance on the basis of the first phase.

After two phases of development, the cooperation zone has become an industrial park with the best comprehensive environment, the largest investment density, the highest unit output, and the most concentrated Chinese-funded enterprises in Egypt. According to the cooperation zone, as of the end of 2023, the TEDA Cooperation Zone has attracted a total of 160 companies to settle in, with actual investment exceeding US $1.9 billion, cumulative sales of nearly US $4.6 billion, and taxes and fees paid exceeding US $0.25 billion, directly solving nearly 6000 jobs. About 50000 people are employed.

Leading Egypt's Manufacturing Industry Forward

Today's cooperation zone not only has a series of office buildings and production lines, but also star hotels, amusement valleys and other supporting facilities, which can be said to be "building a city in the desert". Egyptian Prime Minister Mahmoud al-Madbouli has also praised the zone as "a model of Egyptian industrial parks".

What is the key to the development of the cooperation zone? Wei Jianqing believes that it is based on capacity cooperation and cultivating the industrial chain according to local conditions. The reporter learned that many characteristic industries have been cultivated in the cooperation zone. For example, the cooperation zone's Jushi Egyptian company established by the Chinese company Jushi has made Egypt's glass fiber industry from scratch.

Recalling the development process along the way, Wu Ping, general manager of Jushi Egypt, once said that when Chinese Jushi entered Egypt, the difficulties encountered were far beyond imagination. Nevertheless, the Chinese builders rose to the challenge. From the beginning of investment in Egypt in 2012 to the end of 2013, the first phase of the Jushi Egypt project with an annual output of 80000 tons of glass fiber production line was completed and put into operation. From the first phase to the fourth phase, the total annual production capacity of Jushi Egypt glass fiber production base reached 340000 tons, becoming the largest glass fiber production base on the African continent. Today, Egypt has become the world's fourth largest fiberglass producer. This is also China's first large-scale glass fiber production base built independently overseas.

In the cooperation zone, examples like megalithic egypt abound. For another example, the bowl and basket production line invested by the United States has filled the technical gap in the field of dishwasher manufacturing in Egypt. It has not only cultivated welding skills, but also promoted the localization of key technologies such as ingredient processing and powder immersion technology, so that the localization results of the home appliance industry continue to benefit ordinary people. The same example is the Sino-Egyptian joint venture Xidian-EGEMAC, which provides power transmission and transformation equipment and complete engineering services to the Middle East and African markets. At present, localized production has been realized, and the entire production process is basically completed by Egyptian employees.

Wei Jianqing said that the starting area of the TEDA Cooperation Zone (Phase I) has now formed a scale effect, and each industry is driven by leading enterprises, forming an industrial chain of "horizontal clusters and lateral chains. Data show that as of the end of 2023, 56 companies have settled in the cooperation zone expansion zone (phase II), attracting more than US $0.55 billion in agreed investment. Wei Jianqing said that these projects are gradually attracting upstream and downstream supporting enterprises to settle in, promoting the acceleration of industrial agglomeration in the expansion area.

For the future construction, the cooperation zone has a clear and definite vision. In July 2023, the cooperation zone released its 2030 vision-strategic upgrade plan. The plan is to further expand the construction of the TEDA Cooperation Zone project, effectively connect with the Tianjin Dongjiang Comprehensive Bonded Zone, and help Tianjin expand the breadth and depth of opening up. And this is also the "internal and external linkage" promoted by the cooperation zone, building a "one core, two corridors, and three bases" layout.

Wei Jianqing introduced that the "one core" is to take the Dongjiang Comprehensive Bonded Zone as the "core", link with the Egyptian and Saudi projects, and use the export of second-hand cars as the starting point to build a distribution center for automobiles and spare parts; at the same time, use overseas warehouses as the starting point. Build an international commodity distribution center to drive the export of famous and high-quality products in Tianjin; "dual corridors" refers to promote the linkage between Tianjin Port and Egypt Insuhana port, build a logistics and transportation "corridor" in the demonstration area, and promote the TEDA Kechuang City and Egypt's "the belt and road initiative" spatial information corridor project to realize facility connectivity, build a spatial information port in the TEDA cooperation area, and build a spatial information "corridor"; The "Three Bases" is based on Tianjin Software Park, Hong Kong Jinlian and Sino-Singapore Eco-City as fulcrums to give full play to the complementary advantages of the three bases of TEDA Kechuang City, promote development in the areas of investment and trade, finance and skills training.

In Ma Hanzhi's view, the cooperation zone will not only promote Egypt to produce considerable economic benefits, but also radiate to the African continent. "With the acceleration of the construction of a free trade zone on the African continent, the geographical advantages and production capacity advantages of the cooperation zone will help African manufacturing to export to the world and increase Africa's ability to participate in the global industrial chain supply chain." He added.

Digital, green transformation into a new highlight of China-Egypt cooperation

Under the common concern of the heads of state of China and Egypt, the cooperation zone has become a demonstration project for the joint construction of the "Belt and Road" and the "Suez Canal Corridor Economic Belt", and it has also added impetus to the joint construction of the "Belt and Road" between China and Egypt.

In recent years, the "Belt and Road" initiative has been deeply connected with the "2030 Vision" proposed by the Egyptian government. In terms of economic and trade cooperation, since 2012, China has become Egypt's largest trading partner for 11 consecutive years. China is one of the countries with the most active and fastest growing investment in Egypt in recent years.

Egypt's "Vision 2030" states that Egypt will actively participate in international economic cooperation to maximize value added, create decent and productive jobs, and bring real per capita GDP to the level of middle-income countries. Therefore, China and Egypt have focused their cooperation on infrastructure construction. For example, the central business district project of Egypt's new administrative capital undertaken by Chinese enterprises is expected to have all the curtain walls installed by March this year, which is regarded as the "new pyramid" in the mouth of the local people. There is also the Egyptian "Ramadan 10th City" suburban railway, which will be opened in 2022, which greatly facilitates the daily travel of nearly 5 million residents along the line, It provides valuable experience for the construction of intercity rapid rail transit system in Egypt. In addition, Chinese companies have also actively participated in Egyptian energy projects, port construction, and industrial park development to promote Egypt's economic development in many ways.

Speaking of the future development of China and Egypt, Zhou Yiqi believes that green transformation and digital transformation of manufacturing will be new areas of cooperation between China and Egypt. He said, "The current global political and economic situation is becoming more uncertain, and Egypt's development needs to be further upgraded. Keeping up with the trend of global economic green transformation and digital transformation is the key for Egypt to avoid falling into the digital divide and middle-income trap. China has rich experience in green development and digital transformation, which can become a new highlight of China-Egypt cooperation." Ma Hanzhi also believes that the cooperation between China and Egypt in digital economy and other fields will help to enhance the endogenous driving force of Egypt's economic development, improve Egypt's ability to participate in the international division of labor, and help Egypt realize modernization.

In August 2023, Egypt officially became a member of the BRICS family. With Egypt's accession to the BRICS cooperation mechanism, some analysts believe that China and Egypt can use the joint construction of the "Belt and Road" and the BRICS cooperation mechanism to continuously innovate forms of cooperation. In this regard, Zhou Yiqi said that the role of the BRICS cooperation mechanism for China-Egypt cooperation is to provide a broader stage for multilateral cooperation. "With the conflict between Russia and Ukraine and the rise of Western populism, the development of developing countries needs to strengthen South-South cooperation. At the same time, we will jointly explore non-Western modernization paths. Egypt's accession to the BRICS family can give better play to the development coordination effect brought about by South-South cooperation and promote the integration of China-Egypt cooperation with the overall development of the global South."

 

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Source of 21st Century Business Herald

Reporter Hu Huiyin