China, Egypt Sign $15 Billion in Deals as Xi Touts Development

  • China Railway Group scores $1.1 billion rail contract
  • Xi travels to Iran to wrap up three-country Middle East trip

China and Egypt signed $15 billion worth of agreements before President Xi Jinping headed to Iran, where he will finish a Middle East trip aimed at boosting China’s diplomatic clout in one of the world’s most volatile regions.

China Railway Group Ltd. is part of a consortium of companies that won a rail project in Egypt worth $1.1 billion, while China State Construction Engineering Corp. signed a $2.7 billion contract to build a convention center, parliament and government offices, the two companies said in separate filings to the Shanghai stock exchange Friday.

Xi’s five-day trip to Saudi Arabia, Egypt and Iran, his first to the Middle East since taking power in November 2012, marks 60 years of relations between Beijing and the Arab League. The deals are part of China’s "One Belt, One Road" strategy that aims to strengthen economic and transport ties across Eurasia, while raising China’s profile as a global power.

By visiting Tehran, Xi is seeking to maintain Chinese influence accumulated during Iran’s long isolation. Xi is the first major world leader to visit Tehran since the U.S. and European Union lifted sanctions Jan. 16, clearing the way for Iran’s reintegration into the global economy.

Rail Link

In November, national railway operator China Railway Corp. floated a proposal for a 3,200-kilometer (2,000-mile) high-speed train to Tehran from China’s western region of Xinjiang. Officials also hope to finalize a deal for two Chinese-built nuclear power plants during Xi’s visit, Iran’s Tasnim news agency reported Jan. 19.

Xi has announced $35 billion worth of loans on the trip to facilitate China’s cooperation with Middle Eastern nations and help them industrialize, Xinhua reported. China also pledged $20 billion to a fund that will help the United Arab Emirates and Qatar develop energy, infrastructure and high-end manufacturing.

Turmoil in the Middle East stems from the lack of development, and the ultimate solution depends on development, Xinhua News reported Xi as saying in a Thursday speech at the Arab League’s Cairo headquarters.

China also pledged 50 million yuan ($7.6 million) to help improve the lives of Palestinians and 230 million yuan as humanitarian assistance for Syria, Jordan, Lebanon, Libya and Yemen. In the Arab League speech Thursday, Xi offered $300 million for law enforcement and police training in the region.

— With assistance by Clement Tan

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