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Is the United States Losing Egypt to China?

Posted: 11/28/2012 10:01 am

Among the many objectives Egyptian President Morsi set for himself upon assuming office in June was to enhance Egypt's autonomy in foreign policy and reassert its traditional pan-Arab leadership role. He did this with much bravado last week in helping to orchestrate a cease fire between Hamas and Israel, only to be turned upon by many of his own people by foolishly declaring himself supreme leader, whose declarations are unquestionable. He has wasted no time cultivating new alliances since his inauguration, particularly with China, which appears to have sold itself to Mr. Morsi as the power most capable of decreasing Cairo's dependence on Washington while simultaneously facilitating Egypt's rise as a more influential player in Middle Eastern affairs.

In time, the formation of a more formal strategic partnership between Egypt and China does indeed threaten to reduce Washington's sphere of influence over Cairo. Beijing perceives the Egyptian revolution as an opportunity to gain influence in the Arab world, which will naturally come at America's, and the West's, expense. At this juncture, there is every reason to believe that China will be successful in wedging itself between Egypt and the U.S., which will suit both China and Egypt well, given their synchronous objectives.

In August, Mr. Morsi made his first official trip outside the Middle East by visiting China. The decision to visit Beijing before Washington -- or any European capital -- symbolizes China's important role in Mr. Morsi's foreign policy agenda. While the Egyptian 'revolution' remains a work in progress, it provides China an opportunity to establish a stronger partnership with the Arab world's most populous country, which have a history of cooperation preceding the Arab Awakening by more than half a century.

Historical Context

Ties between Egypt and the People's Republic of China (PRC) date back to the 1955 Bandung Conference of Asian and African countries, which laid the groundwork for the creation of the Non-Aligned Movement (NAM). At the conference, Egyptian President Nasser and Chinese Premier Zhou Enlai first met. Nasser, who expressed Egypt's support for revolutionary movements throughout Asia and Africa, and a vision of a strong and independent Egypt, ensured that Egypt became the first Arab or African state to establish diplomatic relations with the PRC.

After the U.S. declined to sell Nasser arms, he quickly turned to China, which supported Cairo's position during the Suez crisis of 1956. Nasser expressed enthusiasm after China first detonated a nuclear weapon in 1964, becoming the first NAM state to join the nuclear club. However, Egypt's support for Moscow in Sino-Soviet disputes, Nasser's criticism of Chinese policies in Tibet, and China's inability to influence the Middle Eastern war of 1967 to the Arabs' favor limited the extent to which the two states perceived the other as a durable and reliable strategic partner. However, bilateral relations continued throughout -- even when President Sadat aligned Egypt with the US during the 1970s -- and China's commitment to non-interference in the affairs of foreign states was well received by the Mubarak regime.

Between 1989 and 2008, Egypt was China's largest market for arms sales on the African continent, purchasing more weapons from China than Sudan and Zimbabwe combined. Today, Egypt is China's fifth largest trading partner in Africa. At the United Nations, Egypt and China have aligned on various issues, including Taiwan's status, resolution of the Arab-Israeli conflict, the invasion of Iraq in 2003, and Western efforts to impose sanctions on Sudan in response to the humanitarian crisis in Darfur. Today both governments oppose a U.S./Israeli strike on Iran's nuclear facilities and foreign military intervention in Syria -- so they see eye to eye on a variety of central issues in global foreign policy.

China and the Arab Street

Egyptian public opinion of the U.S. is overwhelmingly negative, while the majority of Egyptians view China favorably. According to a poll conducted by the Pew Research Center (released on June 13, 2012), 79 percent of Egyptians hold an unfavorable view of U.S. foreign policy and 62 percent hold an unfavorable view of the American people. When asked, "How much does the U.S. consider your country's interests", 80 percent of Egyptians responded "not much" or "not at all". By contrast, between 2006 and 2012, China's favorability ratings among the Egyptian public ranked significantly higher, between 52 percent and 65 percent.

Even as deteriorating economic conditions followed Mubarak's ouster, Egyptian/Sino trade reached $8.8 billion in 2011, a 46 percent increase from 2008. Egypt's trade with China surpassed Egyptian/U.S. trade, which totaled $8.3 billion in 2011 -- a decrease from 2010. This increased economic interconnectedness, coupled with China's popular standing among Egypt's public, are factors that will lead China to invest with more confidence in Egypt. Moreover, China views deeper ties with Egypt as part of an agenda of expanding Chinese influence and commercial ties globally. Given its geostrategic significance, open economy and relatively cheap labor force, Egypt offers China opportunities to increase exports of low-cost consumer goods throughout European, African, Arab and sub-continental markets.

China's reputation on the Arab Street has suffered as a consequence of Beijing's firm diplomatic and military support for the Assad regime in Damascus, but China perceives the cultivation of the Egyptian/Sino alliance as a means of counter-balancing this. China dreams that other Arab states undergoing transition will follow Morsi's lead and establish stronger ties with China. There is a good chance this will occur, as more post-transition states seek an alternative to the US.

The Path Ahead

Speaking before Premier Hu in August, Mr. Morsi identified China as Egypt's "good brother, friend and partner" and referenced the two countries' ancient histories, stating: "... Egypt also boasts a great and old civilization and has a long history comparable to the Chinese civilization and glorious history." In response, the Chinese leader assured his guest that China "will always regard Egypt as a key, trustworthy, cooperative partner." Clearly, geopolitical ambitions drive the cultivation of Egyptian/Sino ties. Egypt is following the course of other Muslim states -- including Pakistan, Indonesia, Saudi Arabia, Iran and Turkey -- which have returned China's embrace, mindful that the tide is turning.

China's silence on Mr. Morsi's attempted centralization of power can essentially be taken for granted as Beijing is not in the habit of condemning other countries for governing undemocratically. The appeal of a rising power that will remain neutral on matters pertaining to Egypt's domestic affairs will continue to bode well for China as it seeks to cultivate even deeper ties with post-Mubarak Egypt. If Egypt continues to benefit from greater Chinese investment - particularly in infrastructure -- Cairo may well significantly decrease economic dependence on Washington within this decade.

That said, the establishment of deeper Egyptian/Sino ties will not constitute the end of U.S. influence in Egypt. With the world's largest economy and dominant military sales in the Middle East, Washington will retain leverage over Egypt into the future. For China to truly supplant the US militarily in Egypt, it will need to become its top military supplier, and that is unlikely to happen any time soon. The US restored military aid to Egypt earlier this year and apparently has no intention of cutting it at this juncture. Too many military-related U.S. jobs are on the line, and too many procurement contracts at risk, if the US were to cut its military aid to Egypt -- and the Egyptian government knows it.

Mr. Morsi is determined to balance Egypt's partnership with Washington by diversifying Cairo's web of foreign alliances and cultivating ties with rising powers. China's foreign policy in Egypt, and elsewhere in the Middle East and North Africa, will be shaped by Beijing's desire to fill the vacuum created by Washington's declining influence. Given how low Washington is regarded by the average person in Egypt and the Arab Street, China should not have too much difficulty inserting itself as a wedge between them going forward. Based on Mr. Morsi's bold strides in foreign policy, China knows it has a friend in Cairo.


Daniel Wagner is CEO of Country Risk Solutions, a cross-border risk management firm based in Connecticut, and author of the book "Managing Country Risk". Giorgio Cafiero is a research analyst with CRS.

 

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