New Delhi, July 11, 2025 – In a significant shift in global economic dynamics, Egypt and China have signed a series of agreements to facilitate trade and settlements using their local currencies, the Egyptian Pound (EGP) and the Chinese Yuan (RMB), effectively reducing reliance on the U.S. dollar. The announcement, made on Thursday, marks a bold step toward reshaping international trade relationships and reflects a deepening strategic partnership between the two nations.
The agreement is seen as a continuation of a decade-long collaboration that began with Egypt’s integration into China’s Belt and Road Initiative (BRI) in 2013. Since then, China has invested approximately $20 billion in Egypt, funding critical infrastructure projects such as the New Administrative Capital and industrial zones in the Gulf of Suez. This latest development builds on a 2016 currency swap deal worth $2.6 billion, which aimed to stabilize the EGP during economic turbulence.Analysts view this move as part of a broader trend of de-dollarization, with several countries exploring alternatives to the U.S. dollar amid concerns over its stability and the geopolitical influence it wields. The shift is particularly notable given Egypt’s historical alignment with the United States, a relationship solidified through military aid and the 1978 Camp David Accords. However, recent geopolitical tensions, including border clashes in Gaza in June 2025, may have prompted Egypt to diversify its economic partnerships.
The agreement is expected to enhance Egypt’s appeal as a manufacturing hub, leveraging its preferential trade agreements with Africa and Europe to attract further Chinese investment, particularly in the automotive sector where companies like BYD and Chery are establishing assembly plants. Meanwhile, China continues to be a major buyer of Egyptian energy resources and agricultural goods, though efforts are underway to address the persistent trade imbalance.
Economic experts suggest that this partnership could set a precedent for other nations seeking to reduce dependence on the U.S. dollar, potentially altering the global financial landscape. However, the move may also strain Egypt’s long-standing ties with the West, raising questions about future diplomatic and economic repercussions.As the world watches this evolving alliance, the Egypt-China agreement underscores a strategic realignment in the Middle East, driven by mutual economic interests and a shared vision for regional development.
The agreement is seen as a continuation of a decade-long collaboration that began with Egypt’s integration into China’s Belt and Road Initiative (BRI) in 2013. Since then, China has invested approximately $20 billion in Egypt, funding critical infrastructure projects such as the New Administrative Capital and industrial zones in the Gulf of Suez. This latest development builds on a 2016 currency swap deal worth $2.6 billion, which aimed to stabilize the EGP during economic turbulence.Analysts view this move as part of a broader trend of de-dollarization, with several countries exploring alternatives to the U.S. dollar amid concerns over its stability and the geopolitical influence it wields. The shift is particularly notable given Egypt’s historical alignment with the United States, a relationship solidified through military aid and the 1978 Camp David Accords. However, recent geopolitical tensions, including border clashes in Gaza in June 2025, may have prompted Egypt to diversify its economic partnerships.
The agreement is expected to enhance Egypt’s appeal as a manufacturing hub, leveraging its preferential trade agreements with Africa and Europe to attract further Chinese investment, particularly in the automotive sector where companies like BYD and Chery are establishing assembly plants. Meanwhile, China continues to be a major buyer of Egyptian energy resources and agricultural goods, though efforts are underway to address the persistent trade imbalance.
Economic experts suggest that this partnership could set a precedent for other nations seeking to reduce dependence on the U.S. dollar, potentially altering the global financial landscape. However, the move may also strain Egypt’s long-standing ties with the West, raising questions about future diplomatic and economic repercussions.As the world watches this evolving alliance, the Egypt-China agreement underscores a strategic realignment in the Middle East, driven by mutual economic interests and a shared vision for regional development.
