Financial Times reported that China had granted hundreds of billions of dollars in loans to several countries, including Egypt, over the past two decades. China started the Belt and Road Initiative in 2013, a network of trade routes connecting Asia with Europe and Africa. China invested in the countries involved in the initiative, including Egypt.
According to a study by researchers from AidData, Harvard University, the Keele Institute, and the World Bank, the initiative confronts many challenges because of debt restructuring efforts and nations’ inability to pay what they spent on infrastructure projects, and other corruption scandals. The report quoted the former chief economist at the World Bank, Carmen Reinhart, as saying that Beijing’s entry into the risky business of bailout loans is to secure its banks.
China spent $240 billion on bailout loans from 2000 to 2021, of which only $104 billion was spent from 2019 to 2021. Egypt is among the countries that received the most Chinese bailout loans, as it ranked third with $15.6 billion, after Argentina with $111.8 billion, then Pakistan with $48.5 billion. On December 2021, the Central Bank of Egypt said that China is the largest creditor to Egypt, with a total of $4.6 billion. According to the head of the Public Debt Management Unit at the Egyptian Ministry of Finance, Mohamed Hegazy, the Egyptian government may issue $500 million in Chinese yuan bonds this fiscal year.